As reported yesterday, a source close to Sanjay Santhanam, Galleon's head of risk management, told Dealbreaker that Santhanam recently expressed fears the firm "could be closed by Friday," due to a massive amount of redemptions. A representative of the fund, however, takes issue with the potential expiration date offered by San-San, pointing out that, technically, the death would be much more slower and painful, and take us through the New Year.
An outside spokesman for Galleon pointed out to Dealbreaker that they don't legally have to return clients money for 45 days after the next redemption date which is November 15th. "So no money is due until January from any of their funds regardless of how many redemption notices are submitted now." (How lucky for Raj that he was cuffed on October 16th, one day after the previous redemption period.) Since the Galleon founder arrest Friday the Wall Street Journal reported at least $1.3 billion as already been redeemed. With a crew of over 100 currently employed how many do you think they'll need to keep around to close out trading positions? We're guessing a few. Traders who actually have their own solid relationships with Galleon investors are likely to branch out on their own like ex-partner Todd Deutsch did in June 2008. Deutsch, who use to run Galleon's Captains fund, now runs a small fund called Bascom Hill and according to Absolute Return was up 2 percent as of August.