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Unaffiliated [Insider] Trader at Galleon Hit With 'Message Case' Sentence
September 2, 2011
Federal prosecutors wanted 6 to 7 years. Craig Drimal's attorney pleaded for home confinement, and his client said he deeply regretted the pain he had caused. "I understand I committed a crime and I deserve to pay a price."
The former trader who made $11.5 million in illicit profits did indeed pay a steep price, at the hands of U.S. District Judge Richard Sullivan. The judge said that calling Drimal a "downstream tippee" was simply incorrect, pointing out that Drimal had made the most money of the persons charged in the insider trading conspiracy. He also said that Drimal contributed money that was used to pay 2 former Ropes & Gray lawyers for the inside information - so he knew what he was doing and what was at stake.
The Message Case Sentencing. "There has to be a message sent to hedge-fund managers and traders: this is not going to be tolerated," Judge Sullivan said, who then ordered Mr. Drimal to serve 5 and 1/2 years in prison, to be followed by 3 years supervised release, and ordered Mr. Drimal to forfeit $11 million. [WSJ Law Blog, 8/31/11]

