| NEW YORK, July 2
NEW YORK, July 2 The U.S. Securities and
Exchange Commission has dropped an insider trading investigation
targeting a former Goldman Sachs investment banker after
initially deciding to file a case against him, the ex-banker and
his lawyer said on Wednesday.
"I'm grateful that the SEC took the time to consider all the
facts and drop the investigation," Matthew Korenberg, the former
Goldman banker, said.
"We knew we would ultimately prevail but I'm happy that I
can now move on with my life."
Korenberg's lawyer John Hueston said the SEC had initially
authorized its staff to take action against Korenberg, 39, who
worked in San Francisco on Goldman's healthcare team. But after
a process that lasted more than a year, the SEC agreed to
de-authorize the action and close the case, Hueston said,
calling the move somewhat unusual.
"I do have to commend the SEC for constructively engaging
with us and considering defense evidence before simply
proceeding and filing," Hueston said.
A spokeswoman for the SEC declined to comment.
The SEC was examining whether Korenberg told his friend Paul
Yook, who was at the time a portfolio manager at Raj
Rajaratnam's Galleon Group, about a planned takeover of the
California company Advanced Medical Optics by Abbott
Laboratories in 2009. Federal prosecutors in California
were probing the matter for criminal violations, Hueston said,
but they took no action before the five-year statute of
limitations expired. Hueston said the SEC investigation had
ended for both men.
Yook briefly left Galleon to start a hedge fund with
Rajaratnam's brother Rengan, who is currently on trial in New
York for charges related to insider trading.
Three years later, both men returned to Galleon, where Yook ran
the healthcare portfolio.
Yook moved with his family to Honolulu after the SEC
investigation began, telling friends, according to press
reports, the inquiry had damaged his ability to live in New
Public records show Yook has a new New York address,
however. Reached by phone on Wednesday, he hung up and did not
respond to a message seeking comment. His lawyer did not
immediately respond to a request for comment.
"Yook and Korenberg had known each other for many years,"
Hueston said. "They had a long-running relationship that had
been quite broad and went beyond professional contact."
Korenberg left Goldman at the end of 2012, months after his
involvement in the alleged insider trading case first became
He declined to discuss his future plans and a Goldman Sachs
spokesman on Wednesday had no immediate comment.
"The investigation was a terrible ordeal for him, but having
the air cleared is important," Hueston said.
(Reporting By Emily Flitter; Editing by Tom Brown)