No one ever said insider traders were geniuses, and the guys fingered Wednesday in a $32 million tech stock scam won’t change that.
The feds arrested corporate lawyer Matthew Kluger and Garrett Bauer, a registered broker who worked briefly for two no-name Wall Street firms, and charged them and a third, unnamed, co-conspirator with illegally trading ahead of 11 mergers over six years.
Kluger “repeatedly stole material nonpublic information about pending mergers and acquisitions from the computer system of his former employer, Wilson Sonsini Goodrich & Rosati,” the Securities and Exchange Commission alleged in a related complaint. Bauer then traded on the information, the SEC said, sharing some of the proceeds with Kluger and the third party, identified throughout only as “the Middleman.”
The group started its hijinks in 2005, cashing in on deals involving Intel (intc), Hewlett-Packard (hpq) and Adobe (ADBE), among others. But by last month they were worrying the feds had caught on, prompting Bauer at one point to urge the middleman to burn $175,000 in cash, lest the authorities find Bauer’s fingerprints on it.
But that’s not the zaniest thing these guys did, according to the SEC. They also called one another to discuss, among other things, the importance of not calling one another. Shockingly, this strategy does not seem to have borne fruit.
No, you guys are good as gold.
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