The second Galleon Group trial is in full swing, and ex-lawyer Brien Santarlas took a huge proverbial swing, from the witness box, against Zvi Goffer, the former Galleon trader. Santarlas testified that he used another lawyer as a middleman to pass confidential information to Goffer, who then paid Santarlas for the tips.
Santarlas use to work at the Ropes & Gray law firm. Another lawyer, Arthur Cutilo, was also employed at Ropes & Gray. They both passed information to middleman lawyer Jason Goldfarb concerning takeovers and mergers that Ropes & Gray was handling. Payments came in cash-stuffed envelopes from Goldfarb. The trio of corrupt lawyers has pleaded guilty in the case.
Prosecutors let the jury hear a tape between Goffer and Goldfarb in which Goffer brags that working for Galleon meant "I'm playing on a bigger scale." It was the confidential information furnished by Santarlas and Cutilo that got Goldfarb the job at Galleon, according to prosecutors.
Goldfarb went so far as to describe to Santarlas the procedure for disposing of cellular phones used to relay the inside information that began flowing in the summer of 2007. Santarlas admitted knowing what he was doing was wrong, he just couldn't stop himself:
"My understanding was the trader would buy the stock and he could essentially make money when the acquisition was announced publicly," he testified.
The trial picks up again on Monday.
© 2011 Hedge Fund Writer LLC
