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Who Is David Slaine?

Posted by Larry Doyle on January 17, 2010 7:45 AM |

Editor’s Note: Please see LD’s update to this fascinating story just published on Tuesday evening February 2nd at 10:02 PM.

With friends like these, who needs enemies?

I have written previously on the importance of strong relationships while working on Wall Street. While the Wall Street numbers and dollars are voluminous, ultimately Wall Street is a ‘people business.’

I have also written previously how ‘information is everything’ on Wall Street. Traders work tirelessly to determine what is moving or what will move the market. Utilizing this information, millions of dollars can be made or lost in the course of a very short time span.

Combining these two critically important factors, it should be no surprise how some will use – but then abuse – these two primary cornerstones of our financial industry.

Folllowing this line of reasoning, are you ever shocked when a guy who cheats on his wife also then cheats on his girlfriend? Where am I going with this? Let’s enter the world of David Slaine, the government’s mole in the insider trading scandal currently rocking Wall Street.

I will profess, I am truly shocked this morning reading how Slaine’s identity and story are reported in The Wall Street Journal’s Wired on Wall Street: Trader Betrays a Friend:

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 nation’s financial markets. Mr. Slaine’s 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: “You got the wrong guy.” He said he has “nothing to do with that case.” He declined to provide a lawyer’s name.

A criminal complaint filed in a New York federal court in November describes in detail the involvement of a cooperating source dubbed “CS-1.” 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. Slaine’s 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.

The insider trading scandal and investigation is unique in the fact that informants like Slaine are wearing a wire to collect information and implicate co-conspirators. That said, why is The Wall Street Journal revealing Slaine’s identity and story at this point? Is the government sacrificing his identity in order to send a message to others within the industry or did the WSJ actually compromise the investigation with this story?

Do you think Slaine will be looking over his back? Do you think others within the industry are now wondering who else is wearing a wire?

Keep your friends close and your enemies closer.


  • Duke

    Slaine may have been involved in what some may classify as the classic insider trading scandals utilizing inside information about merger activities and earnings.

    But let’s be real, how about the abuse of trading information via high frequency trading programs.

    How about the abuse of information by those within the financial regulatory system?

    Where is the line drawn?

    The WSJ is accurate in stating that these activities make America question the integrity of our markets.

    You think?

    One last point. Slaine had a 400 pound bench press? Juice monkey perhaps?

  • Patriot

    Is there truly any doubt that a variety of these sorts of insider activities have been going on for years?

    The bigger question that needs to be addressed and exposed is how the cronies in Washington are basically doing the same thing but under the cover of “government activity.”

    Payoffs for access and information from Wall Street to Washington isn’t that the definition of the Goldman Sachs business model?

    • Ray

      Mob Hits Lufthansa

      The story of the Lufthansa heist was the focus of the 1991 film “Goodfellas,” staring Ray Liotta as Gangster Henry Hill.

      Biggest Theft Of Cash In History: FBI

      What’s truly different?

      Henry Hill meet David Slaine….!!

      • Larry Doyle


        Your reference to the Mob and the Lufthansa heist from the 1970s and featured in the classic film Goodfellas does draw attention to the relationship between organized crime and Wall Street.

        There is rampant speculation that Bernie Madoff was involved in washing money for the Mob. There was also more than a little bit of evidence that Bear Stearns Clearance operation provided cover for a number of boiler rooms that were connected to organized crime.

        Organized crime needs facilities to wash money. Unregulated hedge funds housed offshore ….what do you think?

        The auction-rate securities when operating provided regular liquidity…nice vehicle to wash some dough perhaps?

        When the regulators are asleep at the wheel (and the SEC and FINRA certainly were) and there is a lot of money to be made, rest assured the lowest common denominator in terms of principle will be achieved in order to maximize revenues.

  • Lou

    Loose lips sink ships.

    I have a hard time believing that Uncle Sam is happy with this story. Why would the informant be exposed at this time when there is clearly a lot more to this investigation.

    Did the Wall Street Journal overstep its bounds? Did the public need to know Slaine’s identity at this point if there are much bigger fish on the line?

    Who knows? Would be interesting to know the answer to these questions. I think those questions are just as important if not even more important than what has been learned to date.

    • TML


      Your questions are definitely worth addressing. The WSJ just became a financial tabloid with this story as opposed to a credible newspaper.

      There is NO WAY Slaine should have been compromised at this juncture. Even if word was getting around, the Feds should be allowed to continue their case without this attention.

      • Tiger

        What do you think the chances are that there is some sort of patrol car outside of Slaine’s home right now or maybe Mr. Slaine just moved out today.

        Did the public need to know this information right now? Journalistic sensationalism may sell papers but it does not go a long in allowing an ongoing investigation.

        Maybe Slaine’s usefulness has run its course but the investigation must still have more legs and this puts people very much on the defensive.

    • spencer

      The WSJ is nothing but a tabloid

  • Bill

    Slaine sounds like a moral lowlife with anger management issues. He punched out someone on a trading desk, as well as his supervisor in a gym. Mr. Drimal should have had a dog as a friend.

  • Duke

    An exterminator never finds just one rat.

    Additionally, now when people on Wall Street use the phrase “he’s wired” people are going to wonder if the phrase is being used figuratively or literally.

  • Nigel

    Sounds like someone higher up and politically connected was about to go down and Slaine was the sacrificial lamb. Maybe someone higher up from Goldman Sachs was about to come under the heat, or someone at MS, maybe he was about to expose someone real big when boom, Dave Slaine is published by the Wall Street Burn You. People should cancel their subscription, the WSJ is just another tool for manipulation for the people who are in power. I say fuck the Wall Street Journal, their the biggest scumbags of this scandal. Journalistic integrity? …what a joke. I would have been more impressed if The Post broke the story, fitting for them, but the WSJ… it has now become a supermarket financial tabloid. Nothing is sacred, everything and everyone is for sale. Someone was given the order to leak Slaine’s name.

    • Sam

      Strong, Nigel, very strong. With this story, the WSJ just became a supermarket tabloid.

    • Pimp MyWad

      Slaine’s been an issue for a long long time…as more and more players are outted, more and more insiders will get nervous…the ones who cut deals are always the ones who make out in the end (Fastow). Gary, where are you?

      • LD


        The nature of the beasts involved in these activities are typically: 1. high risk takers, and 2. excessively greedy. The combination of these two characteristics blinds them to ever thinking they will get caught….but when they do, some sing like canaries to save their skin while others remain blind.

        I wish we could hear back from Elyse who had offered some strong opinions on this topic and Mr. Slaine.

  • Nigel

    Hi Sam,
    I’ll take it a step further if your really listening-
    Do the Fed’s really think they are giving the impression of cleaning up insider trading on Wall Street?
    When they put away some of Goldman Sach’s crew
    for insider trading in Sivs, Cdo’s, etc that they packaged and sold so well to pension funds, banks and mutual funds – the 10’s of millions of people that had their retirement accounts invested in these funds that wanted to live out their golden years stress free, and then the scumbags at Goldman Sach’s tell their trading desks that the paper they sold isn’t even worth wiping your ass with after taking a big shit and to go out and short the daylights out of them – well if that isn’t insider trading then what the fuck is…when they lock away 50 to 100 people from Goldman then I’ll believe the FBI and Federal Prosecutors are cleaning up Wall Street.
    This whole Galleon saga/soap opera is to distract you from the big picture… that Goldman Sach’s made 10’s of billions of dollars on illegal insider trading while selling the public big truckloads of shit.
    The Federal prosecutors are grocery delivery boys for the politically connected, looking to go into private practice down the road so they too can make millions someday, maybe they might even get a job at one of these big banks.
    And don’t forget the Federal Reserve paid out 100% to Goldman on any paper (cdo’s, etc) they were invested in. So even though they were down 15% on 13 billion invested in whatever AIG paper they were holding, the Federal Reserve paid them 100% on it, $13,000,000,000.00 of pure profit.
    So this little ring of insider trading amounts to a little candy store bodega up in Spanish Harlem. The headlines can be substitute to read: The FBI and DEA busted a ring of 20 teenagers in Spanish Harlem for selling drugs out of a bodega. Street value was estimated at $2,000,000.00 while Pablo Escobar the II is shipping $150,000,000.00 worth of drugs weekly into the United States through New York. Do the numbers my friend and don’t be fooled, follow the money.

    • Sam

      Believe me, I’m listening and learning. What a mess and regrettably what a joke…

  • Larry Doyle


    Hope you like the site and will visit and comment often. Sense on Cents covers a wealth of topics addressing the Wall Street-Washington incest. I have written extensively about Wall Street’s self-regulator FINRA. If you care to read some riveting material, check out the following:

    Nasdaq Sale: Why Would Mary Schapiro and FINRA Execs Lie?

    Attorney Richard Greenfield Brands Mary Schapiro and FINRA Execs as “Liars”

    Attorney Claims Wall Street Cop, FINRA, Invested in Madoff (includes video)

    Thanks for your thoughts and perspectives.


  • Elyse

    You should be ashamed of yourself as a journalist. The story in the Journal reads like a tabloid with the facts all wrong. When Slaine said he has nothing to do with the Galleon case, he told the truth. He has not been in contact with the Galleon people since he left the firm. It is not possible for him to be CS1. The case with Drimal was a different case. Drimal and Slaine have not been friendly for more than a decade. Slaine never wore a wire. The hotel meeting was a complete fabrication.
    Slaine was not held responsible for the NASDAQ problems at Morgan Stanley. He was never suspended and the fine was paid by Morgan, not Slaine. The amount of the fine was $25,000, not $100,000. Check your facts.
    The fight that took place between Rosenbach and Slaine was over Slaine confronting Rosenbach on trading on inside information. Rosenbach stuck his finger in Slaine’s face, and Slaine smacked him. Rosenback never had a bruise. There were three witnesses. Again, check you facts. I won’t even validate the absurd French fries story with a comment. The only fact you and the WSJ got right is that Slaine benches 400 pounds. Do some research before you write another story in an attempt to destroy a man’s life and reputation.

    • Larry Doyle


      Welcome to Sense on Cents.

      Which part of my statement,

      “I will profess, I am truly shocked this morning reading how Slaine’s identity and story are reported in The Wall Street Journal’s Wired on Wall Street: Trader Betrays a Friend:”

      do you not understand?

      As you can see, I admitted that I am shocked by this story coming out at this time.

      You address me as if I am involved in the investigation. I am reporting on the WSJ‘s report. Do you understand the difference? If not, then you reveal your own ignorance and there is not a lot I can do to help you.

      If you do understand the difference, then please feel free to provide as much substantive and informed color as you want.

      Visit and comment often.

      • Elyse

        I am far from ignorant. You added color and reported on a story that is not correct. As a former journalist I would never have quoted a source in which I could not validate the integrity of the information without providing the opposing point of view. Clearly you have nothing to do with the investgation, but you are responsible as a journalist to check the accuracy of your sources.

        • Elyse

          In fact, I quoted you several times when I was a journalist at Reiters and you were at First Boston. I also covered you when I was at Cantor. I always believed you knew what you were talking about. It would be far more interesting if you questioned the Journal’s facts rather than repeating them.

          • Larry Doyle


            You write:

            It would be far more interesting if you questioned the Journal’s facts

            I wrote:

            why is The Wall Street Journal revealing Slaine’s identity and story at this point? Is the government sacrificing his identity in order to send a message to others within the industry or did the WSJ actually compromise the investigation with this story?

            Virtually every site on the internet merely copies and pastes a story, regurgitating the WSJ‘s story.

            I am questioning why they are revealing. You obviously would have preferred me to question what they are revealing.

            Different avenues, but we’re going in the same direction.

            Beyond that, I do not directly besmirch Mr. Slaine’s reputation or slander him in any way.

            I am glad you found my site and I welcome your insights. I also appreciate your reference to our past interaction. I pride myself on being fair and honest.

            To be frank, I am not in the position to fact check the work of WSJ reporters. I offer what I believe is critical and thoughtful analysis while also questioning where I believe warranted. I feel I very much took that tact in this piece.

            I will say, I agree with your assessment and the comment above by another reader that this is tabloid journalism.

            Again, please feel free to utilize Sense on Cents as a vehicle to put forth your informed and thoughtful opinions.

    • Nigel


      thanks for shedding some light and facts regarding the Wall Street Slander article on Slaine. I wouldn’t put it past Raj’s lawyers who would need to destroy Slaine’s integrity and reputation should he ever have to testify against the Galleon crew. What better way to do it than to plant an article and have it printed on the cover of the WSJ. Hey, if they print it and they read it, then it has to be true, especially if it’s in the WSJ. Right… pathetic how gullible people are. I hope Slaine gets a big law firm and sues them for millions.
      As a side note to your reporting the facts, I admired Slaine’s masterful self control regarding The Rosenbach Incident (but disappointed). I remember meeting Rosenbach a couple of times many years ago, and he impressed me as being one of the biggest, pompous assholes I ever met. I was very disappointed to hear that Slaine only bitch slapped Rosenbach and didn’t leave him with at least a black eye or two. Sure you got the facts right… bummer, he deserved more.
      I have to thank you for stepping forward, great reporting.
      Keep it up! We need more people like you.
      Right on …”check the facts” – says it all!

  • Pingback: Did the Wall Street Journal just blow this guys cover? « Economics Info()

  • john

    message to Slaine- pussy! pussy! chicken shie pussy!

  • kyle

    The WSJ writer is apparently bitter that someone dared to try and ruin all the fun.

  • Laughing

    Both Slaine and Rosenbach were were
    slimey characters from the the early
    1980’s. Rosenbach was fired from Troster
    Singer for hiding unprofitable trades
    and Slaine was his back stabbing, slow
    witted buddy whose brother got into the
    biz. They deserve to be in the same jail
    cell together.

  • jack

    The guy they should go after is Gary Rosenbach not much better then Raj!! Very slimey firm when at Needhem as well.

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