3rd Circuit upholds longest insider-trading sentence

Former Big Law Partner Matthew Kluger will serve 12 years in prison

Ex-Big Law Partner Matthew Kluger just got some bad news.

In June 2012, Kluger—an ex-corporate lawyer at Cravath, Skadden, Fried Frank and Wilson Sonsini—was sentenced to a record-breaking 12 years in jail for a $37 million insider-trading scheme that lasted 17 years. Kluger, who is 52, had pleaded guilty in 2011 to gathering secrets about pending mergers and acquisitions concerning big companies such as Oracle Corp., Sun Microsystems Inc., 3Com Corp. and Acxiom Corp.

Yesterday, the 3rd Circuit upheld Kluger’s sentence. The court found that there was “good reason” to impose the long prison term on Kluger because, as a lawyer, he took an oath to uphold the law.

“Moreover, it is really quite remarkable that Kluger could not even wait to graduate from law school before using his employment at a law firm to initiate his illegal activities and it is equally remarkable that during most of his legal career he was involved in criminal activity, so that in an actual though perhaps not in a legal technical sense as the term is used in the sentencing guidelines, he truly was a career criminal,” U.S. Circuit Judge Morton Greenberg wrote for the court in a 48-page opinion.

Kluger’s lawyer told the Wall Street Journal that he wasn’t sure if his client would pursue additional legal remedies for his “particularly and unnecessarily harsh” sentence.

Read Bloomberg Businessweek and Reuters for more information.

For more corporate crime stories from InsideCounsel, read:

Former Olympus chairman gets suspended sentence over accounting fraud

Ex-Tiffany VP accused of $1.3 million jewelry theft

DOJ dusts off little-used Travel Act to strengthen FCPA prosecutions

Rajaratnam’s conviction upheld

Skilling’s sentence reduced to 14 years

Former Bristol-Myers exec admits guilt in insider trading case

 

Ashley Post

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