Galleon Defendant Cutillo Pleads Guilty in Insider-Trading Scheme
Arthur Cutillo, a former Ropes & Gray lawyer charged in the Galleon Group LLC insider-trading case, pleaded guilty to disclosing information on transactions the firm was working on.
Cutillo admitted conspiracy and fraud today in federal court in New York. He became the 15th defendant to plead guilty in what prosecutors say is the biggest investigation of insider trading involving hedge funds. He faces as long as 37 months in prison.
“Your honor, I plead guilty,” he told U.S. District Judge Richard Sullivan. “I plead guilty because I am guilty.”
The lawyer was arrested in 2009 and charged with securities fraud, for passing along tips, including secret information that Bain Capital LLC planned to buy 3Com Corp. for 44 percent more than its market value.
Prosecutors said he traded on the information and passed it along to others charged in the scheme, in exchange for kickbacks. He leaked information about at least four planned deals in 2007, according to the Federal Bureau of Investigation.
Another former lawyer at Boston-based Ropes & Gray, Brien Santarlas, pleaded guilty in December 2009 to his role in the scheme.
Cutillo, a 2005 graduate of Villanova University, allegedly passed the information to Jason Goldfarb, a Brooklyn lawyer who is charged in the case. Goldfarb pleaded not guilty.
Prosecutors claim the insider-trading ring was led by Zvi Goffer, founder of Incremental Capital LLC. Goffer has pleaded not guilty.
The case is U.S. v. Goffer, 10-cr-56, U.S. District Court, Southern District of New York (Manhattan).
To contact the editor responsible for this story: David E. RovellaS LEGA at email@example.com.