How so? If Galleon is liquidated, its holdings are likely to be sold, and although Galleon's positions are a relatively small proportion of these companies' total market capitalizations, if those companies have moles inside who fed information to Galleon, the companies will be embroiled in investigations that could at least distract top management. At worst, it could lead to high-level firings.

Based on Galleon's latest SEC filing on its holdings, as of this August, its 10 biggest common stock positions are as follows:

• eBay (EBAY):$81 million
• Apple (AAPL): $59 million
• Google (GOOG): $59 million
• OSI Pharmaceuticals (OSIP): $47 million
• Bank of America (BAC): $33 million
• JPMorgan Chase (JPM):$31 million
• Cisco Systems (CSCO): $30 million
• Dell (DELL): $29 million
• Nvidia (NVDA): $22 million
• EMC (EMC): $22 million

Of course, this list is almost two months old, so Galleon may have changed its positions since. But my analysis of expert networks -- about which I posted here -- reveals that they include individuals with the potential to gain access to significant details pertaining to quarterly earnings of some of these companies. Here are two:

• eBay -- one expert network has 60 members who focus on the company. The list includes James Lippert who claims to sell more than $50,000 in equipment each month on eBay. Two such networks have as a member Brad Schepp, who authored a book on eBay power selling, according to his LinkedIn profile. Is there anything illegal about them sharing sales figures with hedge funds? I lack the legal training to judge.
• Apple -- this August 2009 article by Zero Hedge suggests that Brightstar, which distributes Apple iPhones, is or was a member of one such network. If a big iPhone distributor shares sales data with hedge funds, is this considered inside information? How would Apple feel if it knew that Brightstar was sharing such information? I don't know.

If Galleon's method for earning profit involved getting insider information from each of these companies, then there could be some serious investigations underway there. And who knows how far up and down the line these investigations could reach?

One thing seems sure -- with most hedge funds escaping any serious SEC investigations so far, the average investor doesn't really have a prayer of making money in stocks when competing against tactics like those Galleon is accused of.

Let's hope that Friday's arrests put fear into the hearts of others who may have used such tactics in the past.

Peter Cohan is a management consultant, Babson professor and author of nine books, including Capital Rising (due in June 2010). Follow him on Twitter. He has no financial interest in the securities mentioned.