We’ve heard a lot of crazy stories about how to go about destroying evidence of insider trading over the past few months.
Yesterday in a Galleon-connected insider trading trial, a witness testified that a lawyer called Jason Goldfarb told his alleged sources to destroy cell phones on which they discussed trading.
Goldfarb is accused of trading information with Zvi “Octopussy” Goffer, who is on trial with his brother and business partner at the moment.
During the trial yesterday, a cooperating witness called Brien Santarlas, testified that he had tipped off Goldfarb about impending, not yet public deals, in bars or on prepaid cell phones.
Santarlas then testified that once the deal went public, Goldfarb told his tipsters to destroy their phones in three simple steps:
- Break the phone in half.
- Then, submerge it in water.
- Finally, throw all the pieces in the trash.
Then Goldfarb would supply a new cell phone, and register it under a different name, Santarlas said.
(Of course the only problem with that method, is discussing it on a cell which is being recorded by the feds).
Santarlas says he earned $25,000 for his tips on 3Com, and $7,500 for a tip on Axcan Pharma, the WSJ reported.
Jurors heard Goldfarb talking with Goffer about the pre-paid cell practice, in wiretaps played yesterday in court.
In one recorded call from January 2008, Goldfarb tells Goffer that they need three new cell phones, because a tipster accidentally called Goldfarb’s actual cell from one of the throw-away phones.