Over a period of 17 years, an attorney has been duping a handful of the country’s top law firms.
Matthew Kluger pleaded guilty yesterday to stealing secrets about pending corporate mergers and acquisitions from his employers—which over the years have included major law firms such as Cravath Swaine & Moore; Skadden, Arps, Slate, Meagher & Flom; Fried, Frank, Harris, Shriver & Jacobson; and Wilson Sonsini Goodrich & Rosati—and using the stolen information to conduct an elaborate insider-trading scheme. The scam spanned nearly two decades and garnered more than $37 million in profits.
"Not only did Matthew Kluger defraud the investing public, he betrayed the colleagues and clients who depended on his confidentiality in some of the biggest deals of the last decade," Paul Fishman, U.S. Attorney for the District of New Jersey, said in a statement. "In order to be confident in our markets, investors must have comfort that those with inside information won't abuse positions of trust for personal gain."
Kluger pleaded guilty to one count each of conspiracy to commit securities fraud, securities fraud, conspiracy to commit money laundering and obstruction of justice. Two other individuals—Garrett Bauer and mortgage broker Kenneth Robinson—pleaded guilty for their involvement in the scheme earlier this year.
According to Thomson Reuters, Kluger’s attorney said Kluger participated in the scheme “for selfish reasons that he recognizes and feels terribly sorry about.”
Kluger’s sentencing is scheduled for April 9, 2012. He faces up to 20 years each on the charges of securities fraud, conspiracy to commit money laundering and obstruction of justice, and the securities fraud conspiracy charge could earn him five years in prison.