Ex-Attorney Kluger Appeals Insider-Trading SentenceSophia Pearson
Matthew Kluger, the former lawyer who last year received the longest prison sentence imposed in an insider-trading case, didn’t deserve the 12-year term, his lawyer told the U.S. Appeals Court in Philadelphia.
Kluger, formerly with Wilson Sonsini Goodrich & Rosati PC, was sentenced for his role a scheme that generated $37 million in illegal profit. Kluger, who stole corporate merger tips from four law firms during a 17-year period, got more time than Garrett Bauer, a New York stock trader who made more than $30 million on the scheme, Harvey Weissbard, an attorney for Kluger, told the three-judge appeals panel today.
The sentencing judge “never mentioned how much money Kluger got out of this,” Weissbard said at a hearing. “Doesn’t the amount that he got, that he profited in comparison to someone like Bauer, have any meaning?”
Both Bauer and Kluger pleaded guilty to securities fraud, conspiracy to commit securities fraud, conspiracy to commit money laundering and obstruction of justice. Bauer got nine years in prison. At Kluger’s sentencing in June, U.S. District Judge Katharine Hayden said she judged him more harshly because he abused his position of trust as a lawyer.
Caroline Sadlowski, an attorney for the government, argued today that Kluger’s character influenced Hayden’s decision. Kluger took part in an illegal scheme for 17 years, she said.
“That sets him apart from other defendants,” Sadlowski said. “The amount of money shouldn’t control the sentencing guidelines.”
Bauer made about $32 million in illicit profits, while middleman Kenneth T. Robinson earned more than $875,000 and Kluger more than $500,000. In pleading guilty, Kluger admitted to stealing data on about 30 transactions when he was at law firms including Wilson Sonsini and Skadden, Arps, Slate, Meagher & Flom LLP. The companies included Sun Microsystems Inc., 3Com Corp. and Acxiom Corp.
The Philadelphia appeals panel didn’t indicate when it would rule. Kluger’s attorneys are asking that the sentence be remanded to a federal court judge other than Hayden.
The case is U.S. v. Kluger, 12-02701, U.S. Court of Appeals for the Third Circuit (Philadelphia)