Hope was that the whiff of financial scandal was dying down after fallout from the subprime and credit crisis, Madoff and Stanford Ponzi schemes. Then along came Galleon. Last month billionaire Raj Rajaratnam, founder of the now-defunct hedge fund Galleon Management LP, was arrested by the FBI accused in an insider trading case that allegedly generated more than $25 million in illicit gains. Six others involved in the scheme were also charged including senior executives at major companies including IBM, Intel and McKinsey & Co. Yesterday the Galleon probe widened with the charging of 14 other individuals, including hedge fund traders and managers, lawyers and a former Galleon employee, for their part in the insider trading group. Reports suggest that further arrests can be expected in the coming weeks. The collapse of the Madoff and Stanford schemes fueled litigation on a number of fronts and it is likely that Galleon will do the same. Exactly what the impact will be on professional liability insurance lines such as directors and officers (D&O) and errors and omissions (E&O) remains to be seen. Typically, these types of claims take some time to emerge. In the mean time, Galleon is sure to be a hot topic among those attending the PLUS International Conference in Chicago next week. I.I.I. president Dr. Robert Hartwig will be speaking at the PLUS conference next Wednesday ahead of the opening keynote address by former President Bill Clinton. Be sure to check back on the I.I.I. Web site for a copy of Dr. Hartwig’s presentation. For more on Galleon, check out the D&O Diary.

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