NY trader gets 2 1/2 years in huge insider case

AP News
Posted: Oct 12, 2011 6:53 PM
NY trader gets 2 1/2 years in huge insider case

A Wall Street trader convicted in a massive probe of insider trading at hedge funds was sentenced to 2 1/2 years in prison Wednesday by a judge who said he should have known better because he was a former lawyer who knew the seriousness of his crime.

Michael Kimelman, 40, of Larchmont, was also ordered to pay forfeiture in the amount of $289,079 after his June conviction on a charge of conspiring to trade on confidential information.

U.S. District Judge Richard Sullivan said a significant prison term was necessary to deter others from engaging in insider trading.

"Mr. Kimelman was an attorney. He understood better than most the illegality of this kind of conduct," Sullivan said.

The government said Kimelman and two co-defendants, brothers Zvi and Emanuel Goffer, paid $30,000 in bribes to coax confidential information about pending mergers and acquisitions out of two lawyers who worked for a prominent Manhattan firm. The defendants insisted they based trades on public information. Emanuel Goffer was sentenced Friday to three years in prison while Zvi Goffer was sentenced last month to 10 years.

The judge noted that Kimelman did not pay bribes in the case or carry a prepaid cell phone to conceal the crime, as others in the case did. But he said Kimelman was "highly intelligent, mature, thoughtful" and should have known to dodge a "conspiracy that was broader than most insider trading cases."

Vote Against America, Vote Democrat
Michael Reagan

An earlier trial resulted in the conviction of Raj Rajaratnam, who faces up to 25 years in prison when he is sentenced Thursday. The one-time billionaire, who founded the Galleon Group of hedge funds, was the biggest target in a probe that prosecutors said was the biggest ever against insider trading at hedge funds.

The broader case has resulted in more than two dozen convictions.