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New York Hedge Fund Trader Gets 3 Years in Prison
A hedge fund trader who paid hefty bribes to coax confidential information out of shady lawyers was sentenced Friday to three years in prison by a judge who showed him some leniency after citing the role his brother played in encouraging him to join what prosecutors call the biggest hedge fund insider trading case.
Emanuel Goffer, 32, chose not to address the court before he was sentenced by U.S. District Judge Richard Sullivan, who also ordered him to forfeit the $761,000 he was accused of making in profits from the financial secrets.
His sentencing in a case that resulted in more than two dozen convictions came less than a week before the scheduled sentencing of Raj Rajaratnam, a one-time billionaire hedge fund founder who prosecutors say made more than $72 million in illegal profits through tips he received.
Goffer's brother, Zvi, had worked for a while at Rajaratnam's Galleon Group funds before starting his own company. Last month, Sullivan sentenced Zvi Goffer to 10 years in prison for leading a scheme in which two lawyers at a Manhattan law firm were paid $30,000 each to report information about mergers and acquisitions of public companies before they were announced publically.
Goffer was convicted at trial in June along with his brother and a third man, Michael Kimelman, who awaits sentencing. Prosecutors said Emanuel Goffer helped pay bribes to two lawyers who provided insider information, communicated tips to his brother by using an untraceable prepaid cell phone and made legitimate securities trades meant to disguise the illegal trades that were going on.
"You are clearly not your brother. Your brother was the most involved," Sullivan told Emanuel Goffer just before announcing his sentence. "But you knew better."
The judge said he was taking the possible deterrent effect that he could have on insider trading into account when he chooses the length of the prison term for each defendant.
"Insider trading cases are generating a lot of attention and there is an opportunity to send a message through the sentencings," he said.
Sullivan said the insider trading that the Goffers engaged in was different from the type that occurs when someone hears a secret about a public company over a dinner table.
"This was a deliberate scheme to procure inside information, privileged information from a law firm by bribing lawyers, corrupting them to breach their duty to their firm, to their clients," he said.
Sullivan described Emanuel Goffer as one of the winners in life, saying he had supportive parents and a good upbringing, but still chose crime: "Your fall is hard to explain because there was no justification for it except for a desire for more, which boiled down to greed."