Weston man sentenced to prison for insider trading
Published 2:50 pm, Saturday, September 3, 2011
A federal court judge on Wednesday sentenced a Weston man to five and a half years in prison for his part in an insider trader scheme involving technology firms and pharmaceutical companies, according to a report from Bloomberg News.
Craig Drimal, 55, a former hedge fund trader with Galleon Group LLC, pleaded guilty in April to six counts of conspiracy and securities fraud, admitting that he and others at Galleon traded on inside information from lawyers at Boston-based Ropes & Gray LLP working on transactions involving 3Com Corp. and Axcan Pharma Inc.
Drimal, who netted close to $10 million from the fraud, was also ordered to forfeit $11 million and to serve three years of supervised release.
He made personal profits of about $6.5 million from trades in 3Com and Axcan and also earned about $4.3 million from trades based on tips about the pending acquisition of Hilton Hotels Corp. in 2007. He also made another $950,117 from trades made on information about a takeover of Kronos Inc., prosecutors said.
Drimal met with government representatives after Federal Bureau of Investigation agents approached him before his arrest in November 2009 and sought his cooperation, the government said. Drimal then contacted former Galleon Group trader Zvi Goffer and told him about the probe, against instructions, prosecutors said. Drimal also lied to SEC personnel in July 2008 when they interviewed him about the reason why he bought Axcan stock, prosecutors said.
Goffer was convicted of all 14 counts against him in June, in the second trial of defendants charged in a nationwide investigation of insider trading at hedge funds.
Goffer's former boss, Galleon Group co-founder Raj Rajaratnam, who owns an estate in Greenwich, was convicted of insider trading in May. Prosecutors are seeking a sentence of more than 24 years when Rajaratnam is sentenced Sept. 27.