Press Releases


Former Galleon Group Employee And Hedge Fund Founder Ali Far Sentenced In Manhattan Federal Court For Insider Trading

FOR IMMEDIATE RELEASE
Monday, February 11, 2013

Preet Bharara, the United States Attorney for the Southern District of New York, announced that ALI FAR, a former employee of Galleon Group and founder/portfolio manager of Spherix Capital Partners, was sentenced today to one year of probation for his participation in multiple insider trading schemes during which he obtained, shared, and traded based on material, nonpublic information (“Inside Information”) stolen from several public companies. FAR pled guilty in October 2009 to one count of conspiracy to commit securities fraud and one count of securities fraud pursuant to a cooperation agreement with the government. He was sentenced today in Manhattan federal court by U.S. District Judge Robert P. Patterson.

According to the Information and statements made during FAR’s guilty plea proceeding and his sentencing:

Between 2003 and March 2009 – a period that spanned FAR’s tenure at Galleon and Spherix – he solicited Inside Information from a number of sources who provided the information in breach of duties to their employers, for purposes of trading securities. FAR traded on the Inside Information for the benefit of the hedge funds where he worked. He also shared certain Inside Information with others in the hedge fund industry in exchange for trading ideas and other Inside Information. Together, he and his co-conspirator at Spherix gained approximately $5,209,464 for their hedge fund by placing trades in Spherix accounts based on Inside Information.

For example, FAR solicited Inside Information from Ali Hariri, a family friend and technology executive, who pleaded guilty and was sentenced to prison as a result of his participation in illegal insider trading. On multiple occasions, beginning in 2008, Hariri provided FAR with Inside Information about the business performance of Hariri’s company, and FAR traded based on that Inside Information, reaping hundreds of thousands of dollars in illegal profits.

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In addition to his probation, FAR, 51, of Saratoga, California, was sentenced to a fine of $100,000, a $200 special assessment, and 100 hours of community service.

Mr. Bharara praised the investigative work of the Federal Bureau of Investigation. He also thanked the U.S. Securities and Exchange Commission.

This case was brought in coordination with President Barack Obama's Financial Fraud Enforcement Task Force, on which Mr. Bharara serves as a Co-Chair of the Securities and Commodities Fraud Working Group. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.

The case is being handled by the Office's Securities and Commodities Fraud Task Force. Assistant U.S. Attorney Reed Brodsky is in charge of the prosecution.

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