Reuters: Regulatory News: Trio settles SEC insider trading suit for $33 mln

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Trio settles SEC insider trading suit for $33 mln Apr 25th 2012, 21:17 By Katya Wachtel NEW YORK, April 25 | Wed Apr 25, 2012 5:17pm EDT NEW YORK, April 25 (Reuters) - Three men who pleaded guilty last year in an elaborate 17-year-long insider trading scheme agreed on Wednesday to pay a combined $33 million to settle civil charges filed by U.S. securities regulators. Former corporate lawyer Matthew Kluger, stock trader Garrett Bauer and former mortgage broker Kenneth Robinson were charged a year ago by New Jersey federal prosecutors with trading on inside information ahead of at least 11 corporate deals. Federal prosecutors and the U.S. Securities and Exchange Commission charged that the group got inside information on the deals from Kluger while he worked as a corporate attorney at several large law firms. All three men pleaded guilty to the criminal charges last year. The men are scheduled to be sentenced on June 4. As part of their settlement with the SEC, the trio agreed to give up their ill-gotten gains plus interest. Bauer will pay $31.6 million to settle the lawsuit, while Kluger will pay $516,000, the investor protection agency said. Robinson, who cooperated with the SEC's probe will pay $845,000. The SEC said that the terms of Robinson's settlement "reflect credit given to him... for his substantial assistance and cooperation in the investigation." Robert Khuzami, director of the SEC's Division of Enforcement, said in a statement that the men "schemed to outsmart law enforcement by structuring their relationships and communications to avoid detection and frustrate insider trading detection mechanisms." Kluger and Bauer used public payphones and prepaid disposable cell phones to share information with middleman Robinson as part of their effort to avoid detection by law enforcement. Kluger stole merger secrets while he was working for law firms Wilson Sonsini Goodrich & Rosati, Cravath Swaine & Moore, and Skadden, Arps, Slate, Meagher & Flom. In one instance, Kluger tipped Robinson on Oracle Corp's impending acquisition of Sun Microsystems Inc in 2009. In another, the trio traded ahead of Intel Corp's takeover of McAfee Inc in 2010. Link this Share this Digg this Email Reprints

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