Union Bancaire Privée, the Swiss private bank that suffered losses from US fraudster Bernard Madoff, said it has no funds with exposure to the Galleon investment business now under a cloud after its owner’s arrest for insider trading allegations.

The bank commented as media reported that UBP had liquidated the UCTIS III fund launched only three months ago after manager Kurland was charged with insider dealing alongside Galleon Group founder Raj Rajaratnam. The fund is called the New Castle Market Neutral US Equity Fund.

"UBP has decided to liquidate the New Castle Market Neutral US Equity Fund, distributed exclusively in some European Union countries through UCITS III vehicles which offer a safe regulatory environment to investors", the bank told WealthBriefing in an emailed statement.

“Regarding Galleon, UBP has no funds of funds invested in Galleon,” it said.

The New Castle fund was a sub-fund of UBP's Luxembourg-based SICAV, Union Bancaire Asset Management, Hedge Fund Review reported.

Galleon Group, meanwhile, is winding down all its hedge funds just days after insider trading allegations against billionaire Raj Rajaratnam, its founder and president, sparked a wave of investor withdrawals, media reports said.

Mr Rajaratnam told clients in a letter yesterday that it was in their “best interest” to conduct an ”orderly wind down” of Galleon’s funds while exploring ”various alternatives” for the business.

Mr Rajaratnam’s letter did not detail when Galleon’s liquidation would conclude, but the hedge fund is expected to follow its standard redemption policy as long as there is no intervention by the government, according to people close to the process, Bloomberg reported. That means investors will not get money back until 1 January, 2010.