US jury convicts 3 in hedge fund trial

New York: The second trial to result from a massive investigation into insider trading at hedge funds ended on Monday with the conviction of a trio of Wall Street traders on charges they paid hefty bribes to coax confidential information out of shady lawyers.

A jury reached the verdict against stock trader Zvi Goffer and two others in federal court in Manhattan after deliberating for five days since June 2. It came a month after the conviction of Raj Rajaratnam, the one-time billionaire who founded the Galleon Group of hedge funds and who was once Goffer's boss.

Goffer, his brother Emanuel and Michael Kimelman were convicted of conspiracy to break securities laws. Sentencing was set for September 23 for Kimelman and October 7 for the Goffer brothers. All three were permitted to remain free on bail pending sentencing.

The defendants, who had insisted they based trades only on public information, remained calm during the verdict. Zvi Goffer's wife and mother left the courtroom in tears. David Pettus, a lawyer for Zvi Goffer, said the verdict was a disappointment and would be appealed.

"Zvi's a very young man, not a person likely to get in trouble again," he said. "We'll prepare the best sentencing arguments we can prepare." Michael Sommer, a lawyer for Kimelman, said: "We are enormously disappointed with the verdict as we believed the evidence clearly showed that Mr. Kimelman had not engaged in any insider trading. We will of course pursue all avenues of appeal."

Michael Ross, a lawyer for Emanuel Goffer, declined to comment. Prosecutors have called the Galleon probe the biggest ever into inside trading in the hedge fund industry. They say the case also marked the first extensive use of wiretaps in an insider trading case.

As in the Rajaratnam trial, the government relied on a vast trove of taped conversations to try to prove Zvi Goffer had engineered a plot to pay two attorneys nearly $100,000 in 2007 and 2008 for the inside tips on mergers and acquisitions that generated millions of dollars in illegal profits.