NEW YORK (Reuters) - 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 York.
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 public.
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