1. Downfall

    Embattled Hedge Fund Shutters

    Giant hedge fund Galleon Group is closing its doors amid a huge insider-trading scandal whose seed was planted with a 2005 job inquiry by a California fund manager with financial troubles. Galleon co-founder Raj Rajaratnam is free on $100 million bail as investigators dig into information gathered from an informant referred to as “Tipper A,” and said to be Roomy Khan, who had worked for Galleon in the '90s. Allegedly, when Khan applied to the hedge fund, Rajaratnam asked her if she had inside information on any public companies. Khan said she could get info on Polycom, a maker of data-conferencing products. The SEC complaint says that Rajaratnam ordered a Polycom trade that earned Galleon $735,000. The government says the informant also gave Rajaratnam tips on Hilton Hotels, with resulting trades making Galleon $4 million, and Google, which brought in $9.3 million for the hedge fund.

    Read it at The Wall Street Journal