The lawyer slapped with the longest-ever prison sentence for insider trading spearheaded an epic scheme that began before he even finished law school.Matthew Kluger was convicted last year of stealing corporate merger tips from four law firms over 17 years and passing them along to a trader, Bloomberg reported.
A federal judge sentenced him to 12 years in prison Monday, reportedly calling him out on his “thuggish” behaviour.
His record sentence might be due to the length of the scheme — or the fact that he orchestrated the entire thing.
Business Insider scoured the documents in Kluger’s case and found the nearly 20-year scheme began in 1994 before Kluger had even graduated law school. He was working as a summer associate at Cravath Swaine & Moore.
The scheme continued when he went on to work at Wilson Sonsini, court records show.
“Early in the scheme, Kluger disclosed information relating to deals on which he personally worked,” FBI special agent Michael Doyle testified.
“As the scheme developed, and in an effort to avoid law enforcement detection, Kluger was careful to steal and disclose information about deals on which he did not personally work, but which he learned about by searching his law firm’s computer system,” Doyle added.
Kluger was the first to contact his alleged co-conspirators about stealing information from law firms, according to Doyle.
As a young lawyer, Kluger would cull information from his law firm’s computer and pass it along to the middleman — identified only as CC-1 in the court documents but who we now know to be Kenneth Robinson.
And Robinson would then pass the information to Garrett Bauer, a trader, who would purchase large quantities of stock ahead of significant trades, according to court documents.
The trio’s illicit trades including buying shares in Omniture Inc. right before Adobe Systems Inc. purchased the company.
Bauer also bought stock in Sun Microsystems, Inc., after Kluger accessed computers in 2009 at Wilson Sonsini and discovered Oracle Corporation was set to buy Sun Microsystems.
Throughout the course of the scheme, the trio invested more than $109 million and netted more than $32 million “in illicit profits,” Doyle said.
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