Convicted trader Zvi Goffer deserves no mercy: U.S.

Reuters News
Posted: Sep 14, 2011 9:28 PM
Convicted trader Zvi Goffer deserves no mercy: U.S.

By Jonathan Stempel

NEW YORK (Reuters) - Former hedge fund trader Zvi Goffer orchestrated a "brazen, sophisticated and extensive" insider trading scheme, and should be sent to prison for 10 to 12-1/2 years, federal prosecutors said in a court filing.

Goffer, who once worked at Galleon Group and was known after the James Bond film as "Octopussy" for his many sources of information, was convicted by a Manhattan jury in June of 14 criminal counts.

Prosecutors called Goffer the ringleader of a scheme to trade on tips about pending takeovers of network equipment maker 3Com Corp and Canadian drug company Axcan Pharma Inc. They also want him to forfeit $10 million of illegal profit.

Sentencing by U.S. District Judge Richard Sullivan in Manhattan is scheduled for September 21.

The defendant, 34, made an unusual plea for leniency two weeks ago, writing a letter included in a court filing in which his lawyer suggested a five- or six-year prison term.

"I stand before the Court today a humbled man who in many respects is not the same brash, reckless, irresponsible man who committed these crimes," Goffer wrote. "I will use this opportunity to become a better son, a better husband and a better father." He also pledged not to appeal his conviction, and said he would repay his illegal profits.


But prosecutors said Goffer personally bribed lawyers to disclose confidential information about pending mergers that their firms were working on, and distributed prepaid cellphones to his cohorts to avoid getting caught.

They also said their recommended sentence of 121 to 151 months, which reflects federal sentencing guidelines, is necessary to punish Goffer and deter others from wrongdoing.

"Goffer's assertion that his 'swagger' at the time of his criminal offenses has been replaced with an 'honest humility' is belied by, among other things, his conduct over a long period of time during his criminal scheme and the timing of his new claim," prosecutors said. "Goffer's claim of a newfound humility rings hollow, as it followed his conviction by a jury and resulting exposure to a substantial term of imprisonment."

The jury that convicted Zvi Goffer also convicted his brother Emanuel at the same trial. Raj Rajaratnam, who ran Galleon, was convicted of insider trading in a separate trial that ended in May. He has yet to be sentenced.

The case is U.S. v. Goffer et al, U.S. District Court, Southern District of New York, No. 10-00056.

(Reporting by Jonathan Stempel in New York; Editing by Gary Hill)