- Middleman Pleads Guilty in $34M Insider-Trading Case, Says Lawyer Stole Info from 4th BigLaw Firm
Middleman Pleads Guilty in $34M Insider-Trading Case, Says Lawyer Stole Info from 4th BigLaw Firm
Posted Apr 12, 2011 4:33 AM CST
By Martha Neil
A man accused of being a middleman in an alleged insider-trading operation that prosecutors say reaped some $34 million in illegal profits over a 17-year period pleaded guilty yesterday in federal court in Newark, N.J., to one count of conspiracy to commit securities fraud and two counts of securities fraud.
While doing so, Kenneth Robinson told the court that a co-defendant in the case, attorney Matthew Kluger, who is now 50, stole information from a fourth law firm at which he worked during that period, Fried Frank, reports the DealBook blog of the New York Times.
Kluger's involvement in the claimed scheme allegedly began in 1994, when he became a summer associate at Cravath Swaine & Moore and started passing tips on to co-defendant Garrett Bauer, a trader. Kluger is also accused of stealing information related to potential mergers and acquisitions while subsequently employed as a lawyer at Skadden Arps Slate Meagher & Flom and Wilson Sonsini Goodrich & Rosati, as well as leaking insider information from Fried Frank, where he was working a decade ago.
Robinson, who has agreed to cooperate in the prosecution, says he served as the middleman between Kluger and trader Garrett Bauer, now 43, passing information—and cash—between the two men as they sought to keep their alleged scheme secret by communicating on prepaid cellphones and pay phones, the newspaper recounts.
ABAJournal.com: "Accused Middleman ID’d, Expected to Plead in Alleged Insider Info Theft By BigLaw Attorney"