Remember David Slaine? For those who need a refresher, he is the former Morgan Stanley managing director and ex-Galleon trader who began working as an FBI informant in 2007 and who was outed for doing so by the Wall Street Journal in January 2010. At the time, we learned a few notable things about Slaine, some of them germane to his role in helping the government go after people trading on material non-public information, others special in their own way, like:

1. He takes french fries, and perhaps all snacks, very seriously.

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.

2. He doesn’t wait for people to towel off and get dressed before knocking their teeth out.

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.

3. Humans aren’t the only ones often asked “you want a piece of me?”

He once smashed a computer keyboard in a fit of rage, says a person familiar with the incident.

4. While working on Wall Street, he eschewed the traditional channels of employee recruitment (Wharton, etc), preferring instead to pick up fresh analysts at the club.

While at Morgan Stanley, he met [Craig] Drimal, then a nightclub bouncer at the Vertical Club in Manhattan. The two quickly formed a friendship based on a shared passion for weight lifting and their mutual ability to bench-press 400 pounds…Shortly after arriving at Galleon, Mr. Slaine persuaded Galleon officials to give a position to Mr. Drimal, who then was working as a bouncer at the Roxy nightclub in Manhattan.

5. Being a person with whom he “formed a friendship based on a shared passion for weight lifting and [a] mutual ability to bench-press 400 pounds,” possibly the greatest line written about anyone who’s ever worked on Wall Street and which which cannot be said enough, means little in the long run if he knows you’ve been playing it fast and loose with securites laws.

In July 2007, the FBI showed up at Mr. Slaine’s door on W. 57th Street in Manhattan and confronted him. Mr. Slaine agreed to help the government. At the time, federal prosecutors in Manhattan were trying to make headway on another investigation that eventually led to the charges involving Galleon. They asked Mr. Slaine who he knew that might be participating in insider trading. Mr. Slaine’s answer: his friend Mr. Drimal, according to people familiar with the matter. In September 2007, Mr. Slaine—identified in the complaint as CS-1—tried out his body wire for the first time, meeting Mr. Drimal in New York. During the meeting, Mr. Drimal gave Mr. Slaine a piece of paper with four stock symbols, according to the complaint. He told Mr. Slaine the four companies were all acquisition targets. At the meeting’s end, Mr. Drimal told Mr. Slaine to destroy the list. He warned him to “be careful” in trading the securities because no news of the takeovers had surfaced publicly…After the meeting, Mr. Slaine went to a nearby hotel where an FBI agent was waiting, says a person familiar with the matter. The pair went to a room where Mr. Slaine removed the wire.

Anyway, Bloomberg recently checked in to see what Slaine’s been up to these last couple years and other than his “experience” with the FBI being “tremendously traumatic,” he seems to be doing pretty well.

For instance, he’s:

…earned serious accolades from the government.

“Slaine’s cooperation has been nothing short of extraordinary,” Assistant U.S. Attorneys Andrew Fish and Reed Brodsky wrote in court papers before Slaine was sentenced this year for his own illegal trade. “Slaine’s cooperation was one of the key factors that led to a series of successful investigations and prosecutions.”

…been working with canines.

He is a partner in a small New York chain that trains and grooms dogs. It’s called Spot.
“He loves animals,” Elyse Slaine said.

…convinced himself/others that insider trading is like baseball, in that you’re allowed three strikes. Trading on material non-public information doesn’t count against you if you only do it once; to that end, you don’t earn the title “insider trader” until you’ve made several illegal trades.

“Throughout my career, I refused to work for certain firms knowing it was how they got their ‘edge,’” Slaine wrote in a letter to his sentencing judge. “I am not, nor have I ever been a man driven by greed.” [...] Slaine, who for more than a decade has volunteered at a charity for needy Bronx residents, took a job as head trader at Chelsey Capital, a Manhattan hedge fund. In early 2002, an analyst named Erik Franklin rejoined Chelsey. Franklin arrived with a secret: A longtime friend, who was a member of the investment review committee at UBS Securities, had agreed to repay a $25,000 loan by tipping Franklin to UBS ratings changes before the firm made them public. The tips generated $2 million in profit on insider trades for Chelsey, according to court papers. At his guilty plea in 2009, Slaine admitted he used an illegal tip as well. He made $532,287. It was the only time Slaine traded on illegal information, prosecutor Fish later told a judge. “It was just one trade,” Slaine’s ex-wife, Elyse Slaine, said in an interview.

To review: numerous trades based on inside information = guilty man driven by greed; one trade based on inside information = just a dog lover/gym junkie whose only crime is being in possession of guns (arms) that are illegal in all 50 states.

Dream Insider Informant Led FBI From Galleon to SAC [Bloomberg]
Earlier: Cross David Slaine And He’ll Make You Wish You Were Never Born

28 comments (hidden to protect delicate sensibilities)
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Comments (28)

  1. Posted by Equinox | December 3, 2012 at 1:25 PM

    "Shampoo is better; I go on first and clean the hair! Conditioner is better; I leave the hair silky and smooth! Oh, really, fool?! Really!"

  2. Posted by Not Anal_yst | December 3, 2012 at 1:25 PM

    Any good stories about bonds formed over the mutual ability to bench 250 lbs?

  3. Posted by VonSloneker | December 3, 2012 at 1:27 PM

    So basically, he's livin' the dream. Lucky dog.

    - D. Kneale

  4. Posted by NakedShort | December 3, 2012 at 1:34 PM

    Thats too bad I bet his card tricks would have been a hit in prison.

  5. Posted by Laxbro | December 3, 2012 at 1:37 PM

    Gary Rosenbach and Slaine were in a steam room together…as Mr. Rosenbach lay on his back on a bench, Mr. Slaine punched him, giving him a black eye and ending their friendship."
    - – -
    To be fair, naked guys who get a little TOO cozy in the stream room, i.e. laying down, doing ridiculous ninja stretches and or gas the place with too many menthol crystals, deserve to be punched in the face.

  6. Posted by Guest | December 3, 2012 at 1:57 PM

    Yeah, but I bet he can't bench 400 lbs while in the steam room at the same time.

    -Steamy Gasparino

  7. Posted by Laxbro | December 3, 2012 at 1:59 PM

    Shortly after arriving at Galleon, Mr. Slaine persuaded Galleon officials to give a position to Mr. Drimal, who then was working as a bouncer at the Roxy nightclub in Manhattan.
    - – -
    Reminds me of the old saying, "Keep your friends close, and your coke dealer closer."

  8. Posted by Alt_EST | December 3, 2012 at 2:02 PM

    "Yeah, definitely killing it!"

    -Internal Monologue of David Slaine While Looking Into the Mirror, Staring Himself in the Eyes, and Considering That Hat

  9. Posted by Hobbes | December 3, 2012 at 2:02 PM

    "As Mr. Rosenbach lay on his back on a bench, Mr. Slaine punched him, giving him a black eye and ending their friendship."

    We usually consider that the start of something special.

    -Harvard BDSM Club

  10. Posted by Mr. Wide Stance | December 3, 2012 at 2:11 PM

    So, he left Galleon bc he didn't like cheaters. Then, he proceeded to Chelsey, and, well, cheated.

  11. Posted by PermaGuestII | December 3, 2012 at 2:11 PM

    "While at Morgan Stanley, he met [Craig] Drimal, then a nightclub bouncer at the Vertical Club in Manhattan"

    I thought Vertical Club was a gym?

    -NYer with vague memories of the mid-90s

  12. Posted by Sex Bagel | December 3, 2012 at 2:13 PM

    OK terrific!

  13. Posted by Shinebox | December 3, 2012 at 2:16 PM

    Yeah, it's called Brokeback Mountain.

  14. Posted by Harry | December 3, 2012 at 2:19 PM

    One time, we successfully mated a bulldog with a Shih-Tzu. We called it a bullshit.

  15. Posted by Home Despot | December 3, 2012 at 2:22 PM

    Ha!…. Drimal. What a tool!

  16. Posted by Rim Shot | December 3, 2012 at 2:25 PM

    Back when Slaine was a young bank teller, a man came in and said, "I'd like to check my balance….' so he pushed him over!

  17. Posted by Laxbro | December 3, 2012 at 3:05 PM

    If I made $532,287 on an illegal trade I'd prob go out and buy my dream car: a 2013 Buick LaCrosse

  18. Posted by St. Copious | December 3, 2012 at 3:06 PM

    Things not to do at your sentencing hearing: Try to pass of as NBD a crime that netted you in one day what the median US household earns in a decade. (And probably 3x what the judge about to sentence you earns from a year of dealing with idiots like you every day).

  19. Posted by Historical Precedent | December 3, 2012 at 3:22 PM

    That line about Slaine ending his friendship with Rosenbach is brilliant. Like saying John Wilkes Booth ended Lincoln's viewing of the play.

  20. Posted by Quant me maybe | December 3, 2012 at 3:34 PM

    Slaine is really that bad guy from the original Highlander movie. So good thing no one has made him really mad or off with their heads and he absorbs their powers.

  21. Posted by qwestion | December 3, 2012 at 3:36 PM

    "Improve your performance."

    Bad enough when your wife says it. In the steamroom, too? Harsh.

  22. Posted by Quant me maybe | December 3, 2012 at 3:36 PM
  23. Posted by Guest | December 3, 2012 at 3:38 PM

    Above Scores on E 60th st.

    -NYer who likes to assert her vague memories as facts

  24. Posted by SAT Quant | December 3, 2012 at 3:41 PM

    Chelsey Capital : Buyside : : JT Marlin : Sellside

  25. Posted by Guest | December 3, 2012 at 5:49 PM

    From which film in Jeff Gundlach's collection is this screen shot taken?

  26. Posted by Camel_toy | December 4, 2012 at 8:38 AM

    Mr. Slaine—identified in the complaint as CS-1—tried out his body wire for the first time, meeting Mr. Drimal in New York

    "Nah, nah, nah…youre gonna need a bigger wire than that for these babies"
    Looks down
    flexes left pec, then right pec
    looks up and winks

  27. Posted by Fei Zhang | December 4, 2012 at 10:24 AM

    There can be only one.

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