The cooperation of a single Wall Street trader in the government’s broad insider-trading investigation directly led to the prosecution of 10 individuals, making him one of the most productive informants in U.S. financial history, lawyers say.
The disclosure of the specific role played by the trader, David Slaine, came in a court filing by prosecutors. In a letter to a judge, the U.S. credited Mr. Slaine with being the most important cog in an unprecedented wave of insider-trading cases, which have resulted in guilty pleas or convictions of 53 out of a total of 56 individuals charged by the government since late 2009.
“Slaine’s cooperation has been nothing short of extraordinary,” the government said in the filing. “It is difficult to overstate the significance.”
In the letter, prosecutors urged leniency by federal Judge Richard J. Sullivan in sentencing Mr. Slaine, whose guilty plea to securities fraud and conspiracy to commit securities fraud was unsealed by the U.S. last year. His sentencing is scheduled for January 20.
Mr. Slaine, 52 years old, and his lawyer couldn’t be reached for comment. The Manhattan U.S. Attorney’s office declined to comment, as did Judge Sullivan.
Often the help of cooperators leads investigators to top executives in corporate and white-collar fraud cases. But Mr. Slaine’s role is unique because of the large number of prosecutions he led investigators directly to, lawyers say.
It is unusual for the government to attribute such a large role to a cooperator, says Michael Weinstein, a New Jersey lawyer and former federal prosecutor. “It clearly shows the government relied upon him and that the information he provided was so imperative and the pleas so numerous that they gave him great credit.”
Mr. Slaine was identified for the first time publicly by The Wall Street Journal in a January 2010 page-one article. In it, the Journal described how Mr. Slaine secretly gathered evidence for two years for the government, wearing a wire to gather evidence against his friend and weight-lifting partner, Craig Drimal.
Mr. Drimal pleaded guilty last year to securities fraud and conspiracy charges and was sentenced to 66 months in prison.
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