Trading Places

TP

The government determined that Garrett Bauer, Ken Robinson and Matthew Kluger illegally traded on over 30 corporate transactions over a 17-year span.  The illegal trades generated $37 million in illicit profits with the bulk of the profits (approximately $33 million) going to Garrett.  Although Garrett profited the most from the scheme, it was Matthew Kluger who bore the brunt of the responsibility and culpability, as he was the one who betrayed the trust of his employers and leaked sensitive material nonpublic information. 

Caption: Garrett talks about his experience in prison

During sentencing, U.S. District Judge Katharine Hayden claimed that Matthew behaved in an “amoral nature, where anything and everything involving trust and honor was thrown out of the window because of that blissful access to information that Mr. Kluger enjoyed.”  She also claimed that his actions were particularly insidious because as a lawyer, he had taken oaths of integrity and honesty. She finished by saying that: “People stay out of the market in part because they think it’s skewed toward the insiders.  These people may be right.”

Caption: An expert talks about the rationale behind Garrett’s sentencing

Garrett Bauer was sentenced to nine years in prison.  Matthew Kluger was sentenced to 12 years, which ranks as the longest prison sentence for insider trading in U.S. history to date.  Ken Robinson, who cooperated with authorities and helped to further incriminate both Garrett and Matthew, was sentenced to 27 months in jail.

Caption: An expert talks about what tipped the SEC to Garrett’s insider trading