NEW YORK – A former Wall Street trader who sought to avoid prison by wearing a wire in a far-reaching insider trading probe got his wish on Friday when a judge sentenced him to three years of probation.
Under sentencing guidelines, David Slaine had faced a potential maximum term of nearly five years behind bars for his role in a $3 million insider trading scheme hatched nearly 10 years ago. But U.S. District Judge Richard Sullivan spared Slaine prison time after prosecutors credited him with helping secure other white-collar convictions.
"I'm deeply ashamed of the bad decision I made in 2002," Slaine said his sentence was announced in federal court in Manhattan. "I've learned that I'm not above the law."
Along with probation, the 52-year-old Slaine also was ordered to log 300 hours of community service and pay a $500,000 fine.
Slaine once worked for the Galleon Group, the firm run by disgraced former billionaire Raj Rajaratnam.
Rajaratnam is serving an 11-year prison term after being convicted in what prosecutors have billed as the largest hedge fund insider trading investigation in history.
Facing allegations he profited from inside tips at a different firm, Slaine quickly agreed to cooperate with the FBI by letting agents wiretap his phone and by wearing a body wire to make secret recordings of hedge fund insiders. He emerged as a key government witness last year at the trial of Zvi Goffer, a broker charged with paying cash for confidential stock tips.
Slaine testified he met with the broker in 2007 and tried to coax him into revealing the identity of his source.
"Obviously the guy's wired into somebody or he is somebody," Slaine said during one recorded conversation. "He's talking to some lawyer, he's talking to some banker. He's talking to somebody."
Asked about his work with FBI agents, Slaine testified, "They gave me a job to do. I listened to them and did what they told me."
Goffer was convicted on charges he got his information from crooked lawyers at a Manhattan firm. He was sentenced last year to 10 years in prison.
When the charges against Rajaratnam and Goffer were announced in the fall of 2009, prosecutors bragged that they had used wiretaps to a degree that was unprecedented for white collar investigations.