Call Now For a Free Consultation:
(614) 502-6165

Former Attorney Received the Longest Sentence Ever for Insider Trading

By Chad M. Kohler, Esq.

11.03.29 Chad 1.1306071146055

White collar criminals who plead guilty to, or are convicted of, financial crimes are traditionally given probation or light sentences, with only brief terms in prison. But there are notable exceptions. In 2011, hedge fund manager Raj Rajaratnam was given an 11-year term in prison for insider trading. A year later, Matthew Kluger got 12 years, the longest sentence ever for insider trading.

Kluger was an attorney working on mergers and acquisitions for large law firms. For 17 years, he was meeting up with a friend, Kenneth T. Robinson, who then passed confidential information on forthcoming mergers to a friend of his, a trader named Garrett Bauer. There was never any direct communication between Kluger and Bauer. But when Robinson eventually conducted a trade in his own name, rather than through Bauer, the SEC caught on. Bauer pled guilty to conspiracy to commit securities fraud and other crimes. He is serving a nine-year sentence. Robinson pleaded guilty securities fraud and conspiracy in April 2011 and, after cooperating with authorities in the investigation, was sentenced to 27 months.

recent article published in Fortune magazine covers an in-depth interview with Kluger from his federal correctional institution in Morgantown, WV. On the length of his sentence, Kluger said that he "got a New Jersey judge who wanted to send a flashing red message of caution." The total profits from the information Kluger provided to the conspiracy approached $37 million with Bauer receiving the majority of the money. Kluger was sentenced according to the Federal Sentencing Guideline based on the amount of the total gain, not the amount he personally realized from the trades (which was around $600,000). His sentence was affirmed on appeal.

The information contained in The Firm’s posts on its blog, fraud alerts, investigations or elsewhere on the site is based upon information obtained from other sources including, but not limited to, news outlets and federal, state, and regulatory agency filings. All suspects and subjects of postings herein are presumed innocent until proven guilty in a court of law or administrative action and any and all crimes are alleged until a court or regulatory agency finds otherwise .

Share This Story
If you found the information provided by this article useful, consider sharing to your social media channels to help others in their search for reliable resources.
Consult with Our Legal Team
There is never a cost associated with a consultation
Columbus Office

614-224-6000
305 W. Nationwide Blvd
Columbus, OH 43215
Meyer Wilson
New Orleans Office

900 Camp Street 
Suite 337
New Orleans, LA 70130
Los Angeles Office

310-905-8688
2029 Century Park East,
Suite 400N
Los Angeles, CA 90067
Cleveland Office

216-600-1355
4781 Richmond Rd.
Suite 400
Warrensville Heights, OH 44128
Bloomfield Hills Office

248-817-8214
41000 Woodward Ave.,
Suite 350
Bloomfield Hills, MI 48304
Quick Links
The information contained in this Website is provided for informational purposes only, and should not be construed as legal advice on any subject matter. No recipients of content from this site, clients or otherwise, should act or refrain from acting on the basis of any content included in the site without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from an attorney licensed in the recipient's state. Read More
The information contained in this Website is provided for informational purposes only, and should not be construed as legal advice on any subject matter.
Read More
chevron-down linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram