A former hedge fund consultant was sentenced Wednesday to 2 1/2 years in prison for insider trading, a crime that a judge said seemed to be growing in prevalence despite a continual crackdown by authorities against it.
U.S. District Judge Jed Rakoff noted the need for deterrence as he sentenced James Fleishman for his September conviction by a jury on insider trading charges.
Fleishman, 42, was among those charged in a government probe of so-called expert consultants who connected powerful hedge fund managers with employees of public companies who were willing to divulge secrets about earnings.
The judge questioned the progress that has been achieved despite three or four decades of prosecutions aimed at discouraging insider trading.
"The ability of the government to detect it is so difficult that all the evidence suggests trading on inside information has increased rather than decreased," Rakoff said. "Clearly, greater deterrence is required."
Fleishman, of Santa Clara, Calif., was convicted of conspiracy and wire fraud after a 2 1/2-week trial. Prosecutors said he made more than $800,000 for three years of work as an executive at the California-based firm Primary Global Research.
Defense lawyer Ethan Balogh had argued that Fleishman worked "honestly and openly with no intent to steal."
"He had no basis to believe others were stealing, misappropriating information; rather, he was an honest salesman doing his job," Balogh said.
Prosecutors said the conspiracy that Fleishman participated in enabled hedge fund managers to hear about highly confidential Apple sales forecasts information, new product features for the iPhone and a top-secret project known internally at Apple as "K48," which became the iPad.
When he announced the charges, U.S. Attorney Preet Bharara said that a "corrupt network of insiders at some of the world's leading technology companies served as so-called `consultants' who sold out their employers by stealing and then peddling their valuable inside information."
The prosecution grew from a probe that resulted in the arrest of billionaire hedge fund founder Raj Rajaratnam on securities fraud charges. Convicted at trial, Rajaratnam this month began serving an 11-year prison term, the longest ever given in an insider trading case. An additional two dozen people arrested in the Rajaratnam probe have been convicted.
The truth about gun deaths: numbers and actual solutions
Thomas Sowell - Charlatans and Sheep: Part III
Paging Mitt Romney: Kremlin openly mocking the White House by releasing secretly taped meeting
Should House Republicans Draft Paul Ryan To Be Speaker? | RedState
The Problem Isn't Guns Or White Men | Human Events
- Vladimir Putin’s Russia Adopts Concealed Carry
Not Welcome in Umpqua: Armed Protest May Greet President's Attempt to Exploit Tragedy - Bearing Arms - Barack Obama, Mass Shooting, Oregon, Umpqua Community College