Soros, Citadel Hire Hedge-Fund Analysts From Galleon

Date: Tuesday, January 12, 2010
Author: Saijel Kishan, Bloomberg

Soros Fund Management LLC and Citadel Investment Group LLC hired three employees from Galleon Group LLC, the hedge-fund firm that closed after its billionaire founder Raj Rajaratnam was charged with insider trading.

Eric Wasserstrom and Rajeev Patel will analyze the financial-services industry for the New York-based hedge-fund firm started by billionaire George Soros, according to a person familiar with the matter, who asked not to be identified because the information is private. Wasserstrom didn’t return a telephone message seeking comment. Patel declined to comment.

Charles Benziger was hired as a consumer-industry analyst at Citadel, said Devon Spurgeon, a spokeswoman for the Chicago firm run by Ken Griffin. Benziger, who was a portfolio manager at Galleon, is joining Citadel’s San Francisco office.

The moves mean efforts by Galleon described by Rajaratnam’s lawyer in October to negotiate the staff’s transfer to another firm haven’t yet come to fruition. An unspecified firm is in talks to add the U.S. stock team, according to a person familiar with the matter, who declined to be identified because the discussions are private. Renee Soto, a spokeswoman for Galleon, declined to comment.

Rajaratnam, 52, was indicted last month on charges that he profited through inside stock tips from corporate officials and hedge-fund executives. His firm managed about $3.7 billion before it liquidated assets after the manager and several colleagues were arrested on Oct. 16 in what prosecutors called the largest insider-trading case involving hedge funds.

Rajaratnam Denies Charges

Galleon had about 124 employees with offices from New York to Singapore, according to the firm’s marketing documents.

Rajaratnam, who is free on $100 million bail, has pleaded not guilty to the charges. He’s scheduled to appear in court on Jan. 12 in a bid to get his bail reduced.

Leon Shaulov, who ran Galleon’s Buccaneer’s Fund, a short- term trading vehicle, plans to start a hedge fund with former Galleon traders Owen Li and Adam Smith, Hedge Fund Alert reported Jan. 6. The Buccaneer’s Fund gained 13.8 percent last year through October after losing 9.4 percent in 2008.

Hedge funds gained 20 percent last year after losing a record 19 percent in 2008, according to Hedge Fund Research Inc.

To contact the reporter on this story: Saijel Kishan in New York at skishan@bloomberg.net.