Operators Snapping Up Talent From Galleon

The list of former Galleon Group staffers who have resurfaced at other hedge fund operations continues to grow.

Three months after Raj Rajaratnam abruptly shut the doors of his firm amid an insider-trading scandal, at least four investment staffers and one marketing specialist are working for other managers, including some big-name firms. Three other Galleon alumni have opened an office with tentative plans to launch a hedge fund.

Among the latest to return to the industry:

*Charles Benziger, who managed a large portfolio of consumer stocks for Rajaratnam, landed this month at Ken Griffin's Citadel Investment.

*Grant Hutchinson was hired by London-based Polygon Investment this month to work on marketing and investor relations.

*Nadeem Janmohamed, a technology-stock analyst, took a job this month with S Squared Technology of New York.

Two other analysts, Eric Wasserstrom and Rajeev Patel, went to work in recent weeks at Soros Fund Management. Meanwhile, ex-Galleon traders Leon Shaulov, Owen Li and Adam Smith are laying the groundwork for their own hedge fund.

Rajaratnam shuttered his $3.7 billion firm in October, shortly after he was arrested and charged with 13 counts of insider trading. The early buzz among hedge fund recruiters was that the scandal would make it difficult, if not impossible, for many staffers to find work in the industry.

But it now looks like former Galleon employees with solid track records and no ties to the insider-trading scheme are being welcomed by fund managers hungry for talent.

"We continue to see talented [ex-Galleon] hedge fund professionals identify new opportunities at leading funds," said Marc Wiener of New York-based Mercury Partners. "Galleon boasted a large number of employees with superior knowledge in their respective industries who greatly contributed to fund performance."

Galleon itself is still in the final stages of winding down. While the investment staff was let go in November with two months' severance, some back-office personnel continue to work at the firm's Madison Avenue headquarters. They are mostly responding to document requests by federal investigators and seeing to other operational needs.

One issue that initially tripped up some investment staffers was whether to sign a gag order as part of their separation agreement. Some traders balked at signing, even though they risked losing their severance pay. Their main concern, according to people familiar with the situation, was that a gag order would prevent them from discussing their experience with prospective employees.

In the end, ex-staffers received their severance pay whether or not they signed the gag order. And they also received something else: Just before Christmas, bonus checks arrived. The amounts were in line with past bonuses, except that Galleon deducted the two-months' severance pay.

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