Goldman manager investigated in insider trade case: source

Wed Feb 29, 2012 5:04pm EST
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By Grant McCool and Lauren Tara LaCapra

NEW YORK (Reuters) - U.S. prosecutors are investigating David Loeb, a managing director of Goldman Sachs Group Inc, as part of an insider-trading probe focusing on the company's hedge-fund clients, a person familiar with the case said on Wednesday.

Loeb works with technology hedge-fund employees, including an Asia-based analyst, Henry King, who is also under investigation, according to another source briefed on the case.

The sources declined to be identified because the matter is not public.

A spokesman for Goldman declined to comment on insider-trading probes and on the current employment status of Loeb and King. Neither Loeb nor King responded to emails seeking comment.

According to a regulatory filing and court records, employees of Goldman Sachs, Wall Street's most influential firm, have been pulled into the insider-trading case of a former board member, Rajat Gupta, who is preparing for trial on criminal and civil charges.

No one at Goldman has been accused of any wrongdoing.

Gupta, a former director of Goldman Sachs and Procter & Gamble Co, and a former global head of the McKinsey & Co consultancy, is to go on trial in May. He has denied charges that he tipped now-convicted Galleon Group hedge fund founder Raj Rajaratnam with Goldman and Procter & Gamble board secrets.

In an annual 10-K filing with the U.S. Securities and Exchange Commission on Tuesday, Goldman included an item "Insider Trading Investigations" that did not appear in regulatory filings a year ago or at the end of the third quarter. A 10-K gives a comprehensive summary of a public company's performance and includes issues that are material to securities investors.   Continued...