Wednesday, 7 October 2015
Last updated 10 hours ago
May 20 2011 | 1:32pm ET
A disbarred lawyer told the jury in the second Galleon Group insider-trading case that, through another lawyer, he passed confidential information to former Galleon trader Zvi Goffer—and that he was paid for the tips.
Brien Santarlas, formerly of law firm Ropes & Gray, said that he and another lawyer at the firm, Arthur Cutillo, gave lawyer Jason Goldfarb information about acquisitions Ropes & Gray was working on in exchange for tens of thousands of dollars. The money was handed over in cash, stuffed into envelopes, Santarlas testified.
Santarlas, who, like the other two lawyers has pleaded guilty in the case, is the first witness in the trial of Goffer, his brother, Emanuel and Michael Kimelman. He is cooperating with prosecutors.
Those prosecutors played a tape between Zvi Goffer and Goldfarb, in which the former told the latter, "I'm playing on a bigger scale," after his hire by Galleon. The government says that Goffer used the confidential information he received from Santarlas via Goldfarb to get the job at Galleon in 2008.
Santarlas testified that Goldfarb instructed him on how to destroy the cellular phones used to pass on the tips, which he said he began doing in the summer of 2007. Santarlas told the jury that he knew the information would be used for trading.
"My understanding was the trader would buy the stock and he could essentially make money when the acquisition was announced publicly," he testified.
The trial will resume on Monday, when Santarlas will continue his testimony.
Oct 7 2015 | 4:57am ET
Charity A Leg To Stand On (ALTSO) will hold its 12th Annual Hedge Fund Rocktoberfest – NYC on October 15 and its 4th Annual Rocktoberfest - Chicago on October 22. Read more…