OCTOPUSSY AND TWO OTHERS ARE FOUND GUILTY OF INSIDER TRADING
The second Galleon related jury trial ended with the conviction of three more defendants. On Monday a jury in Manhattan returned guilty verdicts against Zvi Goffer, formerly of Schottenfeld Group LLC, Emanuel Goffer, formerly of Spectrum Trading LLC and Michael Kimelman. All three men at one time were employed at Incremental Capital. Zvi Goffer was convicted of two counts of conspiracy to commit securities fraud and twelve counts of securities fraud. Emanuel Goffer and Michael Kimelman were each convicted of one count of conspiracy to commit securities fraud and two counts of securities fraud. Each will be sentenced later this fall. U.S. v. Goffer, 10-cr-0056 (S.D.N.Y.)
Zvi Goffer was known as Octopussy because he had so many sources of inside information. According to the superseding indictment, he was part of an insider trading ring which included: Jason Goldfarb, an attorney in New York; Arthur Cutillo and Brien Santarlas, both attorneys at the law firm of Ropes and Gray LLP in New York; Craig Drimal, who worked in the office of, but not for, Galleon Group; and David Plate, a proprietary trader at The Schottenfeld Group.
Zvi Goffer and others paid sources for inside information. Those sources included Messrs. Cutillo and Santarlas. The two attorneys furnished the group with information misappropriated from the law firm about pending corporate deals. Those include the acquisition of 3Com Corporation and Axcan Pharma, Inc.. That information was then passed to others including Emanuel Goffer and Michael Kimelman who traded. Previously Messrs. Cutillo, Santarlas and Drimal pleaded guilty.
The first of the expert network insider trading trials is also underway in Manhattan. Winifred Jiau, a former Primary Global Research LLC consultant, is alleged to have furnished inside information regarding Nvidia Corporation and Marvel Technology Group Ltd. to hedge fund managers including Samir Barai who recently pleaded guilty (here). U.S. v. Jiau, 11-cr-00161 (S.D.N.Y).