BOSTON - A hedge fund company whose manager is criminally charged in an insider trading case has told clients it's shutting down its funds, after investors pulled out millions in the wake of the allegations.

A letter obtained Wednesday by The Associated Press said Galleon Group LLP plans "an orderly wind down" of its funds while it explores "various alternatives for its business." Portfolio manager Raj Rajaratnam, who is currently free on $100 million bail, wrote to clients and employees that he wants to reassure them the funds are liquid, meaning assets such as stock holdings can be converted to cash for distribution to fund shareholders.

New York-based Galleon Group manages about $3.7 billion. Prosecutors who filed the case against Rajaratnam and five others on Friday said Galleon had previously managed up to $7 billion. Publicity surrounding the case led some investors to withdraw money.

Galleon Group's letter did not specify what business options the company was exploring. A person familiar with the situation said Galleon had been approached by parties interested in a possible purchase of the company. The person requested anonymity because of the sensitive nature of the situation.

The person said distributions to shareholders were expected to follow normal procedures for the funds, with cash to be returned starting Jan. 1. Hedge funds typically restrict how quickly investors can get cash back, with waiting periods that can stretch several weeks.

Rajaratnam is accused of conspiring to use insider information to trade securities in several publicly traded companies, including Google Inc. In Wednesday's letter, he said he's "innocent of all charges."

Rajaratnam, 52, was ranked No. 559 by Forbes magazine this year among the world's wealthiest billionaires, with a $1.3 billion net worth. Rajaratnam has been described as a savvy manager of billions of dollars in technology and health care hedge funds at Galleon, which he started in 1996.

Prosecutors who announced the case Friday said it was the largest ever brought against a hedge fund. The Securities and Exchange Commission, which brought separate civil charges, said the scheme generated more than $25 million in illegal profits.

Galleon Group said it had no knowledge of the investigation before it was made public. The company said it intended to cooperate with authorities.

Prosecutors say Rajaratnam obtained insider information and then caused the Galleon Technology Funds to execute trades that earned a profit of more than $12.7 million between January 2006 and July 2007.