An internal note from a JPMorgan Chase analyst suggested that its alternative asset management arm should lower its allocation in Galleon's technology fund, because of "more negative news about Raj and his cohorts", reports the Financial Times.
Raj Rajaratnam, the founder of the Galleon hedge fund, was arrested earlier this month along with five alleged co-conspirators in what is reported to be the biggest insider trading scandal in history.
The JPMorgan note went on to allege that Mr Rajaratnam and his hedge fund were operating in ethical grey areas.
"If these allegations are true, there are some serious issues about business conduct," it said.
Earlier this week, Hector Ruiz, the former CEO of Advanced Micro Devices (AMD), was implicated in the scandal after it was alleged he had passed on inside information about a new venture AMD was about to start with the Abu Dhabi government.
By Tony Aynsley