UPDATE: Galleon Wind-Down Of Hedge Funds 'Largely Complete'

Galleon Group's liquidation of its hedge funds' portfolios is "largely complete," a person familiar with the matter told Dow Jones Newswires on Tuesday.

The person said that the liquidation was done under "very difficult conditions," considering Raj Rajaratnam's hedge fund firm had about $3.7 billion under management as recently as two weeks ago. There has been "very little value leakage," the person said, meaning the sales of stock have been done at advantageous prices.

Some of Galleon's largest positions were in big companies like Apple Inc. (AAPL) and Google Inc. (GOOG), but the firm also had positions in non-mega-cap stocks, like OSI Pharmaceuticals Inc. (OSIP).

The only major market disruption that Galleon's unwinding might have caused occurred in Sri Lankan stocks early last week. Rajaratnam, who was charged with insider trading 11 days ago in New York, was born in Sri Lanka. Rajaratnam has said he is innocent.

The person familiar with the situation said that Galleon is still on track to pay back its investors by Jan. 1.

-By Joseph Checkler, Dow Jones Newswires; 212-416-2152; [e-mail]