Two directors have resigned from the board of the fund whose listing was suspended by the Bermuda Stock Exchange (BSX) after another board member was charged in an insider trading case.

The BSX announced yesterday that John Eager and Robert Steinberg had stepped down as directors of New Castle Market Neutral Offshore Fund Ltd., effective October 19.

Their resignations came three days after the arrest of Mark Kurland, the co-founder of New Castle Funds LLC, and a fellow board member of the Bermuda-listed fund.

Also arrested were Danielle Chiesi, a former consultant on New Castle's hedge funds, Raj Rajaratnam, the billionaire founder of New York-based hedge-fund firm Galleon Group, and three others.

Among Mr. Kurland's remaining fellow directors on the Bermuda-based fund are Scott Merves, Robert Reitzes and Gerald Cummins.

Mr. Kurland started New Castle with Mr. Reitzes in 1995 as part of Bear Stearns Cos.' asset-management unit.

This week, the fund stated through the BSX that it had changed its fund administrator from Butterfield Fulcrum Group to PNCGIS (US) Inc., with effect from April 2009.

On Monday, the fund stated that Peter Martin had resigned as a director, effective January 6, 2009, and that Mr. Merves, Mr. Reitzes, Mr. Eager and Mr. Steinberg had been appointed to the board, effective the same date.

BSX CEO Greg Wojciechowski told this newspaper last week that the decision to suspend the fund's listing had been a precautionary measure taken after Mr. Kurland's arrest. He added that the BSX was seeking clarification on the impact on the fund of the arrest. The insider trading case has attracted large media attention in the US, because of the involvement of Mr. Rajaratnam, who heads the $3.7 billion Galleon hedge fund and who is accused of conspiring to use insider information to trade securities in several publicly traded companies, including Google Inc.

Mr. Rajaratnam, 52, was ranked No. 559 by Forbes magazine this year among the world's wealthiest billionaires, with a $1.3 billion net worth.