Former Galleon Trader Says He Got Goffer Tips

May 26 2011 | 11:31am ET

Prosecutors in the second Galleon Group trial called a former trader at that firm to testify about his membership in the insider-trading ring, while defense lawyers again pointed out that he had no contact with the defendants.

Michael Cardillo, who pleaded guilty in the case in January, told the jury that he received confidential tips from another former Galleon trader, Craig Drimal, tips that he understood came from yet another former Galleon trader, Zvi Goffer, who is on trial in the case. Cardillo and Drimal, who called each other "Dillo" and "Ruby," respectively, sat near each other at Galleon.

Cardillo said he sometimes overheard Drimal, who pleaded guilty in the case last month, just before the trial began, speaking with Goffer over the phone.

"I heard Ruby say that he would call him back on the 'Bat Phone,'" Cardillo testified. Cardillo, who is cooperating with prosecutors, said that referred to a prepaid cellular phone; prosecutors allege that Goffer gave such phones out to members of his alleged insider-trading ring.

But on cross-examination, Cardillo acknowledged he had no direct knowledge of what Goffer and Drimal said to each other, and that he didn't even know the other two defendants, Goffer's brother Emanuel or Michael Kimelman.

Cardillo did, however, say he communicated directly with Galleon founder Raj Rajaratnam's brother, Rengan, who worked at Galleon. But while prosecutors have called Rengan an unidicted co-conspirator in his brother's case, Cardillo said he used Rengan to cover up his illegal actions and not as an active participant in the ring.

Cardillo testified he sent e-mails to Galleon employees, including Rengan, lauding companies whose stock he planned to trade based on confidential information.

"I sent it as a cover-up to buying the stock based on inside information," he explained.

Raj Rajaratnam was convicted earlier this month of insider trading.


In Depth

FINtech Focus: Fundbase Aims To Revolutionize Access To Hedge Funds

Jan 23 2015 | 11:03am ET

Global investment in financial technology—also known as fintech—is booming....

Lifestyle

Ex-Hedge Fund Billionaire Won’t Run For Senate

Jan 23 2015 | 5:48am ET

Ex-hedge fund manager Tom Steyer will not run for Senate after Sen. Barbara Boxer...

Guest Contributor

From Switzerland With Love: Some Hard Truths About Central Banks And Risk

Jan 23 2015 | 7:54am ET

In the wake of the Swiss National Bank uncoupling the country’s currency from...

 

Editor's Note