Dec 9 (Reuters) - Zvi Goffer, a former securities trader known as "Octopussy" because of his many sources of information, has agreed to pay $1.6 million to settle Securities and Exchange Commission civil charges of insider trading.

In one of two civil cases, Goffer will forfeit $1,014,758 in illegal profits plus $231,304 in interest, according to a court filing. U.S. District Judge Richard Sullivan approved that settlement on Wednesday, the filing shows.

In a separate case dealing with alleged insider trading on different securities, Goffer agreed to give up $265,709 in improper gains plus $59,565 in interest, court records show. U.S. District Judge Jed Rakoff approved that settlement on Dec. 4.

Goffer's lawyer Alexander Dudelson was not immediately available for comment.

In a parallel criminal case, Goffer was found guilty by a federal jury in June along with his younger brother, Emanuel Goffer, and a third trader, Michael Kimelman. He was convicted of securities fraud and conspiracy to commit securities fraud and given a 10-year prison term and $10 million criminal penalty.

Prosecutors said Zvi Goffer, who once worked at Raj Rajaratnam's Galleon Group hedge fund firm, was the ringleader who paid tens of thousands of dollars in bribes to two Ropes & Gray lawyers to learn what corporate deals the firm was working on. The lawyers, Arthur Cutillo and Brien Santarlas, have pleaded guilty to criminal charges.

The SEC brought related civil charges against Goffer in 2009, accusing him of tipping and trading on inside information related to pending mergers, including the acquisitions of Avaya Inc and failed acquisition of 3Com Corp in 2007 by Bain Capital Partners.

3Com was bought by Hewlett-Packard in 2010.

Goffer attempted to conceal his conduct, the SEC alleged, by distributing disposable cell phones to both the sources and recipients of his tips.

In a related SEC administrative proceeding, Goffer consented to an SEC order banning him from associating with any broker, dealer or investment advisor, the SEC announced in a press release on Friday.

The civil cases in U.S. District Court for the Southern District of New York are SEC v. Cutillo et al, U.S. District Court, No. 09-9208; SEC v. Galleon LP et al, No. 09-881.

The criminal case in the same court is USA v. Zvi Goffer, No. 10-56.

For the SEC: Robert Kaplan of the SEC.

For Zvi Goffer: Alexander Martin Dudelson of Louis R. Rosenthal.

(Reporting by Terry Baynes)

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