Michael A. Kimelman, 38, was arrested on Thursday, November 5 at his Iselin Terrace home in Larchmont in connection with a massive insider trading case being pursued by both the U.S. Securities and Exchange Commission (SEC) and the U. S. Attorney’s Office for the Southern District of New York. The arrest was one of eight on Thursday, seven in the New York area. It follows six arrests made in recent weeks, all linked to the huge investigation of insider trading at the Galleon Group hedge fund.
A release from the SEC accused Mr. Kimelman of being part of a “Wall Street Ring” that made more than $20 million using tips from an attorney at the international law firm of Ropes and Gray LLP to trade ahead of corporate acquisition announcements.
Mr. Kimelman (at right) was described as a trader at Lighthouse Financial Group LLC, an investment bank and a registered broker-dealer. The SEC alleges that he “illegally traded on material, nonpublic information concerning the proposed acquisition of 3Com” in 2007 to make $273,255 in illegal profits. (See the SEC complaint.)
The SEC is seeking financial penalties that include “disgorgement of illicit profits” as well as fines. The U.S. Attorney’s office has filed criminal charges.
Among those arrested on Thursday was trader Craig C. Drimal, 53, of Weston, Connecticut. According to the court filing, Mr. Drimal was working out of offices at Galleon Management, LP during the time he is alleged to have participated in the insider trading. Also arrested was another former Galleon employee, Zvi Goffer, 32, of New York City, who is alleged to have been at the center of the illegal ring.
Two attorneys were among those picked up: Arthur J. Cutillo, 33, of Ridgewood, N.J., the Ropes and Gray lawyer alleged to have supplied the insider information in return for kickbacks; and Jason C. Goldfarb, 31, in private practice in Brooklyn;
The other traders arrested were: Gautham Shankar, 35 of New Canaan, CT and David Plate, 34 of New York City, who were both with Schottenfeld Group; and Emanuel Goffer, 31, of NYC, who was with Spectrum Trading.
Currently Mr. Kimelman is a registered representative at Echotrade and is listed as a founder and partner at Incremental Capital, LLC. Emanuel Goffer, Craig Drimal and Zvi Goffer are also employed at Echotrade and are associated with Incremental Capital.
According to his profile at MoneyShow.com , Mr. Kimelman has a degree from the University of Southern California Law School and was formerly an associate at the law firm Sullivan and Cromwell, where he handled mergers and acquisitions.
Mr. Kimelman moved to Iselin Terrace in 2003. His wife, Lisa Moskow Kimelman, is in the catering business and at one time worked for Martha Stewart. The couple has three young children.