MANHATTAN U.S. ATTORNEY ANNOUNCES GUILTY PLEA OF CRAIG DRIMAL TO INSIDER TRADING CHARGES

United States Attorney
Southern District of New York

APRIL 26, 2011 ELLEN DAVIS, CARLY SULLIVAN,

PREET BHARARA, the United States Attorney for
the Southern District of New York, announced that CRAIG DRIMAL
pled guilty today to conspiracy and securities fraud charges
arising from a scheme in which he obtained and traded on
material, nonpublic information, including information
misappropriated from the law firm of Ropes & Gray. DRIMAL pled
guilty before U.S. District Judge RICHARD J. SULLIVAN.
According to the Indictment, a Complaint previously
filed in this case, and statements made during today’s guilty
plea proceeding:
In 2007 and 2008, CRAIG DRIMAL obtained material,
nonpublic information (“Inside Information”) from ZVI GOFFER
about several mergers and acquisitions of public companies, and
traded based on that Inside Information. The Inside Information
included information provided by two Ropes & Gray attorneys,
ARTHUR CUTILLO and BRIEN SANTARLAS, regarding the potential
acquisition of 3Com Corporation (“3Com”) and the potential
acquisition of Axcan Pharma, Inc. (“Axcan”). CUTILLO and
SANTARLAS delivered the Inside Information to JASON GOLDFARB,
another attorney, and GOLDFARB provided the Inside Information to
ZVI GOFFER who, in turn, allegedly delivered it to DRIMAL.
DRIMAL then executed trades based on the Inside Information and
made profits exceeding $6 million. Following the public
announcement of the acquisition of Axcan, DRIMAL delivered a cash
payment to GOFFER for the Axcan tip.
* * *
DRIMAL, 54, pled guilty to five counts of securities
fraud based on his trading in 3Com and Axcan, and one count of
conspiracy. The conspiracy count carries a maximum sentence of
five years in prison, and each of the securities fraud counts
carries a maximum sentence of 20 years in prison. DRIMAL faces a
total maximum sentence of 105 years in prison on all counts. He
also faces a maximum fine of $250,000, or twice the gross gain or
loss from the offense on the conspiracy count and a maximum fine
of $5 million on each of the securities fraud counts.
DRIMAL is scheduled to be sentenced by Judge SULLIVAN
on September 9, 2011, at 10:00 a.m.
CUTILLO, SANTARLAS and GOLDFARB previously pled guilty
to conspiracy and securities fraud charges. Charges against
GOFFER remain pending and are merely accusations. He is presumed
innocent unless and until proven guilty.
Mr. BHARARA praised the work of the Federal Bureau of
Investigation and thanked the SEC for its assistance in the
investigation of this case.
This case was brought in coordination with President
BARACK OBAMA’s Financial Fraud Enforcement Task Force, on which
Mr. BHARARA serves as a Co-Chair of the Securities and
Commodities Fraud Working Group. President OBAMA established the
interagency Financial Fraud Enforcement Task Force to wage an
aggressive, coordinated, and proactive effort to investigate and
prosecute financial crimes. The task force includes
representatives from a broad range of federal agencies,
regulatory authorities, inspectors general, and state and local
law enforcement who, working together, bring to bear a powerful
array of criminal and civil enforcement resources. The task
force is working to improve efforts across the federal executive
branch, and with state and local partners, to investigate and
prosecute significant financial crimes, ensure just and effective
punishment for those who perpetrate financial crimes, combat
discrimination in the lending and financial markets, and recover
proceeds for victims of financial crimes.
Assistant U.S. Attorneys ANDREW FISH and RICHARD
TARLOWE are in charge of the prosecution.
11-109 ###
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