Former Galleon Trader Franz Tudor Key to Galleon Case

Prosecutors are counting on recordings made by former Galleon trader Franz Tudor as key evidence against Zvi Goffer and other defendants in the wide-ranging insider trading case, new documents reveal.

Tudor, a 36-year old former portfolio manager at Galleon, was one of two people involved in the Galleon case that wore a recording device to tape conversations with alleged co-conspirators, including Goffer and Michael Kimelman. Both have been charged with insider trading and conspiracy in the wide-ranging Galleon case and have pleaded not guilty.

Tudor's involvement in the case was first reported by the Wall Street Journal in March, but it was unclear how the government planned to use any of the recordings and what evidence he had. Tudor has pleaded guilty to conspiracy to commit securities fraud and is cooperating with investigators, according to the report. He is also prepared to testify against some of the defendants.

But a new document in the case reveals at least part of the government's plans. In a letter to Zvi Goffer’s attorney, Cynthia Monaco, last month, prosecutors said they plan to show that Goffer gave Tudor non-public info about the pending takeover of Axcan Pharma in the fall of 2007 and then asked him for $10,000 to pay off the source of the tip. Prosecutors also plan to show that Goffer passed along a bunch of other tips to Tudor, including a pending buyout of Ventiv Health Inc., that he got from other defendants in the case including David Slaine and Craig Drimal.

The letter was filed as an exhibit to a motion from Goffer requesting the government provide him more details about their evidence in the case.

Before he joined Galleon, Tudor worked at Pequot Capital and SAC. He left Galleon to join Kimelman and Goffer at Schottenfeld Group and Incremental Capital. Goffer and Kimelman are part of a second ring of mostly younger traders ensnared in the wider Galleon case, which is focused on billionaire Raj Rajaratnam.