Craig Drimal, Thirteen Others Arrested For Insider Trading

Among those arrested were Zvi Goffer, a former Galleon employee who later founded his own firm, Incremental Capital; Emanuel Goffer, David Plate and Michael Kimelman, all affiliated with Incremental; the aforementioned Craig Drimal; Arthur Cutillo, a lawyer at the law firm Ropes & Gray; and Jason Goldfarb, a New York lawyer. The names of the other seven defendants weren’t immediately disclosed.

Just as in the original Galleon case, the charges are built on confidential informants and wiretaps. An unnamed informant taped phone calls between those charged in connection with insider trading in companies like 3Com and Axcan Pharma, among others.

The informant has been identified only as “CS-1.” This person has agreed to plead guilty to conspiracy charges. CS-1 is a former hedge fund employee who has been co-operating with the government since July 2007.

While most of these defendants are linked directly to Galleon Group in some way, it's unclear why Craig Drimal was charged. While he worked in the offices of Galleon Group, he was not an employee. It should be noted that some are reporting Craig Drimal as a direct employee of the Galleon Group, so his arrest is somewhat unclear.

Galleon Group is based in Manhattan. Its founder, Ram Rajaratnam is a graduate of the University of Pennsylvania’s Wharton School. Earlier in 2009, he was listed by Forbes as the 559th richest person in the world, with a net worth of $1.3 billion.