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Wednesday, July 24, 2024 | Back issues
Courthouse News Service Courthouse News Service

Another Inside-Trading Guilty Plea

MANHATTAN (CN) - As a jury deliberates the fate of Raj Rajaratnam, billionaire founder of The Galleon Group, another former Galleon trader pleaded guilty to inside-trading charges that federal prosecutors say brought him and others more than $6 million in ill-gotten gains.

Craig Drimal pleaded guilty to conspiracy and five counts of securities fraud on Tuesday. He faces up to 105 years in prison, though the judge to whom he pleaded guilty indicated he might be looking at 6 or 7 years.

Drimal, 54, admitted that he and others at Galleon traded on inside information from lawyers who were working on deals involving 3Com and Axcan Pharma. Two of the lawyers, Arthur Cutillo and Brien Santarlas, formerly with Ropes & Gray of Boston, also have pleaded guilty to inside trading charges.

Cutillo and Santarlas sent the information to another attorney, Jason Goldfarb, who allegedly gave it to Zvi Goffer, one of the few people allegedly involved in the conspiracy who has not pleaded guilty.

Prosecutors said Goffer passed along the information to Drimal, who "then executed trades based on the inside information and made profits exceeding $6 million." Drimal then paid off Goffer after the public announcement of the acquisition of Axcan drove up that company's share price, the U.S. Attorney's Office said.

Drimal will be sentenced on Sept. 9.

Drimal is the 21st person to plead guilty in the giant, octopuslike inside-trading scheme whose alleged top dog, Rajaratnam, is awaiting a verdict on inside-trading charges in Manhattan Federal Court.

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