The Tale of a Wall Street Trader Turned FBI Spy
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. He declined to comment for this story. Through Slaine, the FBI got an insider’s view of Wall Street. Hundreds of reports detailing his contacts with the agency are thick with information both relevant and gossipy (“Raj loves the strip clubs”).
Iv agents can make money for V hedge funds, when the I police such as the SEC catch then they earn commissions with secrecy and deception against their V bosses and other Iv agents. This commission is a plea bargain, they are in effect working for the Bi side of the I police instead of V. The more others they catch the more their sentence is reduced, this can also be a negative sum game where they are like Predatory agents reducing their losses to the O police by turning others in.
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