A month into his 11-year prison sentence for insider-trading, prosecutors said this week that Raj Rajaratnam has a former employee to thank for his incarceration.
Former Galleon Group trader David Slaine's cooperation with authorities was "nothing short of extraordinary," federal prosecutors told U.S. District Judge Richard Sullivan. They asked the judge for leniency when Slaine, who pleaded guilty to conspiracy and securities fraud charges in December 2009, is sentenced.
"Evidence gathered by Slaine played a role in, among other things, the successful prosecution of Raj Rajaratnam and his co-conspirators, as well as the defendants in the Primary Global Research case," prosecutors wrote, tying Slaine to two of the largest insider-trading cases in history. "His assistance was the launching point for many successful and ongoing criminal investigations of multiple insider-trading networks."
Slaine did not testify in Rajaratnam's trial, but did in the other Galleon trial of former Galleon trader Zvi Goffer and two other men. He cooperated in the probe for two-and-a-half years and wore a wire for investigators.
Those taped conversations helped win the wiretap authorizations crucial to the government's case against Rajaratnam and others. "The government would not have been able to obtain these wiretap authorizations without Slaine's cooperation," the prosecutors wrote. "Evidence obtained through the wiretaps led to the successful prosecution of numerous individuals."
Slaine faces up to 25 years in prison.