The Tale of a Wall Street Trader Turned FBI Spy

According to a report in Businessweek Craig Drimal never had a clue when he confided in David Slaine about his trading on illegal tips that his former colleague would relay the information to federal agents. And when Drimal passed Slaine a slip of paper with symbols for four stocks that were “in play” as they lunched at a Burger Heaven in midtown Manhattan, he certainly didn’t plan for it to end up in a file at the FBI. The force of Slaine’s betrayal didn’t hit him until Nov. 5, 2009, when Drimal and 13 others where charged with insider trading. Drimal pleaded guilty and last year was sentenced to 5½ years in jail. “He was crushed,” says Arlene Villamia-Drimal, his wife and lawyer. “He believed David was his friend.”

A former Morgan Stanley (MS) managing director and onetime partner at the Galleon Group hedge fund, Slaine spent two years mining for leaks while working undercover for the FBI. The evidence he gathered led directly to the conviction of Drimal and 11 other people and indirectly to an additional half-dozen convictions, according to court papers. His work also helped prosecutors build a case against Galleon Group co-founder Raj Rajaratnam. “Slaine’s cooperation has been nothing short of extraordinary,” Assistant U.S. Attorneys Andrew Fish and Reed Brodsky wrote in court papers before Slaine, 53, was himself sentenced this year on securities fraud and conspiracy charges…..

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