Lawyer sentenced to record 12 years for $37 million insider trading scheme
By msnbc.com news services
NEW YORK -- A former attorney who worked for some of the country's most prestigious law firms was sentenced on Monday to a record 12 years in jail for an insider trading scheme which lasted 17 years and netted more than $37 million between 1994 and 2011.
Matthew Kluger's sentence is the longest ever handed down in an insider trading case and is one year longer than the 11 year jail term imposed last year on Galleon Group hedge fund founder Raj Rajaratnam for insider trading charges.
Kluger was sentenced by U.S. District Judge Katharine Hayden of Newark federal court. Hayden also sentenced stock trader Garrett Bauer to nine years in jail for his role in the scheme and a third person, Kenneth Robinson, is scheduled to be sentenced on Tuesday.
"At the end of the day, the judge agreed that these were extraordinarily serious crimes that betray people's trust in the stock market and were motivated purely by greed," U.S. Attorney Paul Fishman said.
The 51-year-old Kluger, of Oakton, Va., and former trader Bauer, 44, of New York, admitted last year they conspired with New York mortgage broker Robinson, who acted as the middleman.
Robinson, who pleaded guilty to his role in the scheme, was arrested in 2011 and secretly recorded conversations with the other men, including one in which Bauer discussed lighting $175,000 on fire to erase his fingerprints, according to court documents.
The three men used merger secrets gathered by Kluger while he worked as a corporate attorney for prominent law firms, including Cravath Swaine & Moore; Skadden, Arps, Slate, Meagher & Flom; and Wilson Sonsini Goodrich & Rosati.
Kluger admitted passing advance information on company mergers to Robinson, who would give it to Bauer. The trio was estimated to have made $11 million on tech company Oracle's acquisition of Sun Microsystems.
Bauer kept the majority of the proceeds, using some of the profits to buy a $6.65-million condominium on Manhattan's Upper East Side and an $875,000 home in Boca Raton, Florida.
Assistant U.S. Attorney Judith Germano told the judge that Kluger was the mastermind.
"He had wealth, intelligence and family support," she said. "He abused it all. Why? Because he could."
http://usnews.msnbc.msn.com/_news/2012/06/05/12061538-lawyer-sentenced-to-record-12-years-for-37-million-insider-trading-scheme?lite
DO SOMETHING!
| 