A former Galleon Group trader has pleaded guilty to illegally trading shares in 3Com, as a jury deliberates over the fate of his former boss, Raj Rajaratnam.
The trades were based on inside information, allegedly from lawyers involved in 3Com deals. They took place in 2007, before HP acquired 3Com in April last year for $2.7 billion.
Craig Drimal, 54, a former trader at the hedge fund, was charged in the federal investigation of alleged insider trading at the New York hedge fund. He pleaded guilty to conspiracy and five counts of securities fraud.
Drimal told a New York court that he and others at Galleon traded on inside information obtained from lawyers working on transactions involving 3Com and Axcan Pharma in 2007.
“At the time I did these trades, I believed my conduct was illegal and wrong, and I deeply regret these actions which has caused so much pain to my family and friends,” Drimal told the court.
Over 20 people in the Galleon investigation have so far pleaded guilty to charges of insider dealing, involving tech company shares including IBM, Intel and AMD.
Drimal is expected to be sentenced in September and has been told by the judge he faces between 70 and 87 months in prison, and a fine of up to $5 million.
The jury in the trial of the Galleon fund’s co-founder, Raj Rajaratnam, who is also accused of insider dealing, is currently considering its verdict. Yesterday it asked the judge to replay six recorded calls between Rajaratnam and former Intel executive Rajiv Goel.
Rajaratnam denies all charges brought and insists he traded on well-researched information.