Man gets 2 1/2 years in NYC insider trading probe

AP News
Posted: Jul 29, 2011 7:47 PM
Man gets 2 1/2 years in NYC insider trading probe

A former Wall Street portfolio manager was sentenced Friday to 2 1/2 years in prison for obtaining inside information on technology companies and using pliers to tear apart computer hardware in a failed, middle-of-the-night attempt to cover his tracks.

The government had sought a longer sentence for Donald Longueuil as part of its far-reaching crackdown on insider trading that masks itself as legitimate market research.

U.S. District Judge Jed Rakoff called sentencing guidelines recommending up to 5 years behind bars unrealistic. But he also rejected a defense bid for a far lesser term, saying he needed to send a message that insider trading has "infiltrated too much of the business of this country."

Longueuil had told the judge that the widely publicized white-collar case had left him a "broken man," but added he still hopes to restore his reputation.

"The tremendous shame and embarrassment that I feel will never leave me," he said. "I made mistakes. I crossed the line. I broke the law."

The 35-year-old hedge fund portfolio manager had pleaded guilty earlier this year to conspiracy to commit securities fraud and wire fraud and obstruction of justice.

Prosecutors had alleged Longueuil and two close friends in the world of finance obtained and shared secrets about at least six publicly traded companies to reap millions of dollars in illegal profits. When he saw news reports late last year about the insider trading probe, he destroyed computer logs of conversations with company insiders, according to a criminal complaint.

The complaint said he later told a cooperator he had "chopped up" a flash drive and two external drives with pliers before putting the pieces in plastic bags and, starting out from his apartment at 2 a.m., tossing them in four different garbage trucks during a 40-minute walk around the city _ a scene captured by FBI surveillance.

"It turns out he may have been too smart for his own good, as he now becomes the latest privileged professional to go to jail for brazenly breaking the laws against insider trading," U.S. Attorney Preet Bharara said in a statement.

Longueuil, who's out on bail, was ordered to surrender on Sept. 13 to begin his sentence. He also has forfeited nearly $1.3 million in illegal proceeds.