Thursday, November 21, 2013
The District of Columbia Court of Appeals has ordered disbarment of an attorney convicted of obstruction of justice and other offenses.
The court held that the crime inherently involves moral turpitude, for which disbarment is mandated under governing federal statute.
Huffpost Crime had details of the offenses in this June 2012 post:
A U.S. lawyer who worked for some of the country's most prestigious firms was sentenced on Monday to a record 12 years jail for an insider trading scheme which lasted 17 years and netted more than $37 million between 1994 and 2011.
Matthew Kluger's sentence is the longest ever handed down in an insider trading case and is one year longer than the 11 year jail term imposed last year on Galleon Group hedge fund founder Raj Rajaratnam for insider trading charges.
Kluger was sentenced by U.S. District Judge Katharine Hayden of Newark federal court. Hayden also sentenced stock trader Garrett Bauer to nine-years jail for his role in the scheme and a third person, Kenneth Robinson, is scheduled to be sentenced on Tuesday.
"The severe sentences imposed today are a warning to anyone trying to game the financial markets for their own enrichment," said New Jersey U.S. Attorney Paul Fishman in a statement.
An attorney for Kluger said he planned to appeal against the sentence. "It is unduly harsh and fails to reflect that Mr Kluger received only a fraction of the proceeds from the offense," said attorney Alan Zegas.
An attorney for Bauer did not return a call seeking comment.
Federal prosecutors and securities regulators accused the trio of trading on inside information ahead of at least 11 corporate deals.
The three men used merger secrets gathered by Kluger while he worked as a corporate attorney for prominent law firms, including Cravath Swaine & Moore; Skadden, Arps, Slate, Meagher & Flom; and Wilson Sonsini Goodrich & Rosati.
In one instance, Kluger tipped Robinson on Oracle Corp's impending acquisition of Sun Microsystems Inc in 2009. In another, the trio traded ahead of Intel Corp's takeover of McAfee Inc in 2010.
Bauer kept the majority of the proceeds, using some of the profits to buy a $6.65-million condominium on Manhattan's Upper East Side and an $875,000 home in Boca Raton, Florida.
Robinson acted as a middleman between Kluger and Bauer in an elaborate scheme that involved the use of public payphones and prepaid disposable cell phones in an attempt to hide their activities from law enforcement. Prosecutors said the men netted more than $37 million between 1994 and 2011.
The three men have agreed to pay back their ill-gotten gains plus interest. Bauer agreed to pay $31.6 million, Kluger will pay $516,000 and Robinson settled for $845,000, an amount regulators said reflected his willingness to aid authorities.
Both Bauer and Kluger pleaded guilty in December to one count each of conspiracy to commit securities fraud, securities fraud, conspiracy to commit money laundering and obstruction of justice. Robinson pleaded guilty in April 2011 to one count of conspiracy to commit securities fraud and two counts of securities fraud.
While the court noted that the concept of moral turpitude is not subject to precise definition, obstruction of justice fits comfortably into the court's jurisprudence that defines the concept. (Mike Frisch)