Craig Drimal, the guy who got his start on Wall Street after forging a friendship with trader David Slaine at the gym "based on a shared passion for weight lifting and their mutual ability to bench-press 400 pounds" and later got a gig at Galleon after Slaine convinced the boss to Drimal away from his job as a bouncer at The Roxy, pleaded guilty to conspiracy and five counts of securities fraud this afternoon. [BusinessWeek]
Former Galleon Trader Franz Tudor Key to Galleon Case
Prosecutors are counting on recordings made by former Galleon trader Franz Tudor as key evidence against Zvi Goffer and other defendants in the wide-ranging insider trading case, new documents reveal.
David Slaine, Government's Undercover "Tip-Mining Machine," Apparently Under The Impression Insider Trading Works On A 3-Strike Basis
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 "multi-year experience" with the FBI being "tremendously traumatic," he seems to be doing pretty well.