Over the weekend, the Wall Street Journal outed trader David Slaine as one of the cooperating sources in the Galleon case (although when reached at home and confronted about his role in the ring, Slaine told reporters “you’ve got the wrong guy”). Big D was first approached by the FBI in 2007, when authorities came to him with evidence he’d traded on inside info. Hoping to save himself, Slaine told prosecutors that his friend, Craig Drimal, was part of an “insider-trading conspiracy involving a wide ring of other hedge-fund managers and lawyers.” Obviously, throwing one’s colleague under the bus is no easy thing to do, especially when the guy also happens to be one of your close friends. Drimal and Slaine go way back– they were not just buds, but weight-lifting partners, too, which is probably the tightest bond of all (the two originally met during Slaine’s clubbing days, when Drimal was a bouncer at Vertical and “quickly formed a friendship based on a shared passion for weight lifting and their mutual ability to bench-press 400 pounds”). They were so close, in fact, that soon after taking a gig with Galleon, Big D convinced his bosses to give Drimal– then working as a bouncer at the Roxy– a job as an assistant at the firm. But along the way something must have happened. A confrontation. A blow-up. Something dark, at the gym, involving spotting, for Slaine to rat his special friend out like this. One thing I can tell you about Slaine is that he wouldn’t have done it unless provoked. Like the time at Morgan Stanley, in the nineties, with the French Fries.
In 1993, Slaine triggered a fist-fight with a colleague on the trading floor after needling him because he wouldn’t share his french fries. Others broke up the fight.
You just can’t do that, okay? You can’t not share your fries and expect the Slaine-ster to just sit back and take it, no you cannot. Similarly, you can’t expect to confront Slaine about his unsatisfactory performance and think you’re not going to get your teeth knocked out by a sweaty, glistening, stark-naked Big D.
Mr. Slaine’s performance trading stocks for Galleon’s health-care fund faltered, creating tension, a person familiar with the matter says. One morning early in 2001, before trading began, Gary Rosenbach, then was the No. 2 executive under Mr. Rajaratnam, and Slaine were in a steam room together after exercising at an Equinox Fitness Club. Mr. Rosenbach was pressuring Mr. Slaine to improve his performance. As Mr. Rosenbach lay on his back on a bench, Mr. Slaine punched him, giving him a black eye and ending their friendship.
So obviously Drimal must have done something really bad. The question is what. And while we’re at it, would anyone else like to come forward and discuss a) the various ways in which you wronged David Slaine and b) what his response was? Did you accidentally trip him and for the offense have scalding hot coffee thrown in your face? The D-man’s been doing this thing for a while (he’s a former Nasdaq trading chief at Morgan Stanley, also traded at Jefferies, Galleon and Oracle Partners, and ran a fund with two former SAC employees, Robert Jaffe and Robert Cannon) so you will not be alone in sharing your story.
A real class act
Sounds gay to me.
yup, there is something very queer about the whole thing. very queer, indeed
Hey kids!
Which of these things is not like the other?
a) Galleon
b) Oracle Partners
c) Morgan Stanley
d) Jefferies
@4 I like the cut of this guy's jib.
-cg
Great googily moogily!
I just ripped a massive line of Thin Mints. I cant feel my face. Girls in brown uniforms pushing green boxes on your street corner; shady dudes with 5 o'clock shadows in pleather jackets pushing white baggies in bar bathrooms. Same diff no diff.
Craig Drimal:
http://nimg.sulekha.com/Business/original700/crai…
"one morning early in 2001, before trading began, Gary Rosenbach, then was the No. 2 executive under Mr. Rajaratnam, and Slaine were in a steam room together after exercising at an Equinox Fitness Club. Mr. Rosenbach was pressuring Mr. Slaine to improve his performance. As Mr. Rosenbach lay on his back on a bench, Mr. Slaine punched him, giving him a black eye"
lucky!!
-PJ
@8 not as douchey looking at Slaine, guy on the right in the pic above.
awesome
Slaine's wife: presented without comment (the white woman)
http://cdn.tradersmagazine.com/media/photos/2001/…
@12 Page Not Found
oops, here's the link from 10:
http://cdn.tradersmagazine.com/media/photos/2001/…
Steam room, people laying on backs.. Doesn't sound like Equinox to me.. West Side Club maybe?
-mrp
This headline confuses me, I don't see anything in the story about Tobias or Mr. Show…
@ 14: no handbridge required.
"“quickly formed a friendship based on a shared passion for weight lifting and their mutual ability to bench-press 400 pounds”"
a certain cnbc on-air editor is very turned on right now.
@12…why didn't you say "the woman on the left" instead of "the white woman"? Examine your motives.
~Nat X
Tobias Funke ftw.
Slaine is Tiger without the Tats!
http://assets.nydailynews.com/img/2007/12/08/alg_…
Did we all hear Ms. Burnett's attempt at humor this morning when Mr. Haines was discussing how agitated his producer was getting as Joe and Faber rambled on about "cheese" and "chocolate" and Haines said, "our producer is about to have an "infarction" (heart attack) and sweet Erin stated, "Did you say that on purpose because they were discussing "cheese"?"
Ms. Burnett thought Haines meant passing wind when he said "infarction" and haines was non-plussed about the exchange.
Oh, and the two dudes above look like they have bonded at some point.
@19
GFY honkey
-12
A fist fight over french fries? Was he "battered". Did he "waffle" in telling his side of the story. The "chips" in his armor will tell the tale. Did he ever confide with a woman named "Julienne".
@22 "Oh, and the two dudes above look like they have bonded at some point."
really??????
-the forehead slapper/equinox towel-boy
Hmmm…1993 fist fight.
I wonder how many trading careers the book 1989 book "Liar's Poker" has destroyed with all the references to traders and fights and the requirement being an asshole in order to be a trader of some stature?
@26 the french fries fistfight was clearly a result of DS's douchey disposition/the 'roids in his blood, not fucking Liar's Poker.
Junk In The Journal: Journalist Fails To Fact Check
In a story that appeared on the front page of the Wall Street Journal titled, “Wired On Wall Street,” Susan Pulliam irresponsibly wrote an article with many of her facts wrong, thus drawing an incorrect conclusion. It is a dangerous world we live in when a reputable newspaper such as the Wall Street Journal publishes an article without fact checking.
Pulliam wrote throughout her article graphic detail about David Slaine “wearing a wire strapped to his torso, helping prosecutors to build the biggest insider-trading case in two decades.” She is referring to the Galleon insider trading scandal. While the dramatic visual is quite effective, Pulliam failed to realize that this colorful detail cannot be accurate because “wires strapped to torsos” is as antiquated as the Boom Box. That is not how the FBI or anyone records a conversation. She also states that on several occasions Slaine met an FBI agent at a nearby hotel, removing the taped wire from his body. I challenge Pulliam to produce the name of the Hotel, or anything to verify her statement. The fact is, Slaine never wore a wire, and never met any FBI agent in a hotel.
Pulliam quotes Slaine in a brief interview in which he states, “You got the wrong guy. I have nothing to do with that case.” Slaine was telling the truth when he said, “You have the wrong guy. I have nothing to do with that case.” Pulliam goes on to write that the Wall Street Journal has identified Slaine as “CS-1,” the cooperating source in the Galleon case. The journalist claims to have pieced together this information from the information contained in the complaint, and from interviews with traders, lawyers and government officials involved in the case.
The fact is that David Slaine has had no contact with Galleon since he left the firm in 2001. The Securities Exchange Act of 1934, section 21A states that No action may be brought under this section more than 5 years after the date of the purchase or sale. It is a fact that Slaine has had no contact with Galleon in nine years. It is not possible for him to be CS-1.
Pulliam wrote that Slaine was a trader at Jefferies. Slaine was never employed by Jefferies.
Pulliam wrote that Slaine led prosecutors to Drimal. Drimal had already been under investigation for insider trading for over a year before prosecutors ever questioned Slaine.
Pulliam wrote that Slaine and Drimal were close friends. Slaine and Drimal ended their friendship when Slaine left Galleon in 2001.
Pulliam wrote that it was Slaine that brought Drimal to Galleon. The fact is that Drimal was employed by Galleon before Slaine joined the firm. It was Gary Rosenbach that brought Drimal to Galleon.
Pulliam wrote that Slaine and Drimal first met while Drimal worked at a nightclub called the vertical club. The Vertical club was a gym.
Pulliam wrote that Slaine had a history of violence, stating that he smashed his computer keyboard while at Morgan Stanley over not wanting to share French Fries. The fact was that Slaine pulled out his keyboard when the technology broke down for the fifth time that day, leaving Slaine to trade without knowing his trading positions.
Pullian wrote that while at Morgan Stanley in 1998, Mr. Slaine got in trouble for artificially inflating NASDAQ securities to minimize losses for the firm. She stated that Slaine was fined $100,000 and suspended from trading for three months. The fact was that Morgan Stanley took full responsibility for any issues with the NASDAQ and paid a fine of $2,500. Slaine never had to pay a fine. Slaine was not suspended from trading at Morgan Stanley. In fact, he had already started working at Galleon when the case was settled.
Pullian wrote that shortly after joining Galleon, Slaine’s trading in healthcare stocks faltered. The fact is that while Slaine ran Healthcare for Galleon, the healthcare fund was up over 70%. The healthcare fund was Galleon’s most profitable fund in the firm when Slaine ran that department. Pullian went on to write that Rosenbach and Slaine argued while in a steam room over Slaine’s faulty trading, leading Slaine to punch Gary Rosenbach while Rosenbach was lying down, giving him a black eye. Slaine and Rosenbach argued in a steam room over Rosenbach trading on inside information. Rosenbach stuck his finger in Slaine’s face, and Slaine slapped him. Rosenbach never had a bruise. There were three witnesses in the steam room that could verify an accurate account of what transpired. A few months later, Rosenbach wrote Slaine a letter, apologizing for his abusive behavior.
Pullian wrote that Slaine had gotten into trouble in 2007 after his name was given to prosecutors by one of the 13 traders charged for insider trading originating from a UBS trader. She said that FBI agents showed up at Slaine’s west 57th street apartment in July 2007.
Slaine did not live on west 57th street until October 2008.
One of the few facts Pulliam reported correctly was that Galleon was already under investigation for insider trading before Slaine was ever approached by prosecutors. So why did Pulliam state in the same article that it was Slaine that helped prosecutors build the Galleon insider trading case? Drimal was already under investigation as well. The common denominator in the two insider trading rings is Drimal. Slaine had no access to Galleon or to anyone that supplied information to Galleon. Slaine cannot be “CS-1”
CS-1 had to exist before prosecutors ever spoke to Slaine.
In addition, Pulliam said that government officials were some of her sources in this story. Why would the government expose their “CS-1” at this time?
This story could have never been collaborated by the government.
Tag- I want to draw you ftw
slaine's PR team@28- care to give us a link to that screed?
@28 TLDR
"CS-1"???? Wasn't that the title to a DVD in Gundlach's private office?
Can we get some sort of source/attribution/link for @28. While I was also quite skeptical of the WSJ piece, without knowing where the info in @28 is from…
This is the internet. We don't do attribution.
~The Girl Who Wrote "Now You Have AIDS" on the Mirror of the One Night Stand Bond Trader Before She Left His Apartment back in 1990.
@28: he's still a douche.
@analyst- I put it in google (and g news) and couldn't find it elsewhere.
"Slaine and Rosenbach argued in a steam room over Rosenbach trading on inside information….There were three witnesses in the steam room that could verify an accurate account of what transpired."
Let's see. a) Three witnesses = Slaine, Rosenbach +1, or b) there were three other people in the room when Slaine and Rosenbach discussed "insider trading?" In the latter case, those must have been three pretty good friends, no? Did the whole dept. have a team steam?
@36 Good effort, sugar tits.
Now how about you go get me some coffee!
@ 28
well tell us one thing, hoss: who are you, if not David ¨Steamroom Cleveland¨ Slaine? and at the end, it should read ¨corroborated¨, not collabo…
I think Tix Chick and I wid ipprissiate it if you'd all stop with the "tit" rifferences so soon in the dye.
~A. Drury
New South Wales
Australiar
@39 Guest @28 seems to claim to be Elyse Slaine.
Bess?
i can out bench both you pussies.
-alexi vayner
"As Good It Gets" reference in the tags are the best.
"Where did you learn to talk like that, in some Panama City, sailor wanna hump hump bar? Or is this just getaway day and it's your last shot at his whiskey? Go sell crazy someplace else. We're all full up here."
@43 we've been through this before. "I have to draw you" is a Family Guy reference.
Rosenbach dropped a Cleveland steamer on Slaine in the, you guessed it, steam room.
Hey David Slaine:
You have a puny barrel chest!
-GWA
Gateway Gym rules!!!!!
@40 – love it!
elyse = tod harrison
ms = cheezy gay inside trader
wouldn't be surprised if tod and cramer were both testifying.
IKID5f Looking forward to reading more. Great post.Thanks Again. Much obliged.