A former employee of Galleon hedge fund founder Raj Rajaratnam has pleaded guilty to insider trading charges in New York, strengthening the government's case against the hedge fund operator.
Former Galleon portfolio manager Adam Smith entered the plea Wednesday in Manhattan federal court to charges of conspiracy to commit securities fraud and securities fraud. The charges carry a potential penalty of up to 25 years in prison.
Smith is among more than 15 people who have pleaded guilty in connection with what prosecutors have called the biggest hedge fund insider trading case ever.
Authorities said when they brought the case in 2009 that those who traded securities based on inside information earned more than $50 million in illegal profits.
Rajaratnam has pleaded not guilty.
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