For more than a year, Mr. Slaine, a senior Wall Street trader, was a government mole who wore a wire strapped to his torso, helping prosecutors to build the biggest insider-trading case in two decades.
Using extensive contacts developed over a 27-year Wall Street career, Mr. Slaine has provided leads on possible insider trading by others not yet implicated in a sprawling case involving hedge fund Galleon Group, people familiar with the matter say. That case has rocked Wall Street and Silicon Valley and raised questions about the integrity of the nationâs financial markets. Mr. Slaineâs identity as an informant is being revealed by The Wall Street Journal for the first time.
In a brief telephone interview Thursday night, Mr. Slaine said: âYou got the wrong guy.â He said he has ânothing to do with that case.â He declined to provide a lawyerâs name.
A criminal complaint filed in a New York federal court in November describes in detail the involvement of a cooperating source dubbed âCS-1.â The Wall Street Journal has confirmed that Mr. Slaine is that cooperating source. This story of his involvement in the case was pieced together from information contained in the complaint and from interviews with Wall Street traders, lawyers and government officials involved the case.
Mr. Slaineâs saga demonstrates how the U.S. has used Wall Street players to go undercover and turn on their colleagues. Mr. Slaine, 50 years old, has told prosecutors, among other things, that his friend and weight-lifting partner, Craig Drimal, traded on inside information. In November, Mr. Drimal was arrested at his Weston, Conn., home. Mr. Drimal declined to comment.
