A corporate lawyer and a trader were charged Wednesday with running a 17-year conspiracy to trade on secrets about corporate mergers stolen from three of the nation's most prominent law firms, in one of the largest U.S. insider trading cases on record.
Reuters reports that Matthew Kluger, who until last month was a lawyer at Wilson Sonsini Goodrich & Rosati PC, and the trader Garrett Bauer were accused by the U.S. government of reaping more than $32.2 million of illicit profit by trading on tips about upcoming mergers and acquisitions.
Reuters notes the case is one of the largest in U.S. history based on the amount of illegal profit, a sum that could grow as investigators probe further, a person familiar with the case who was not authorized to talk publicly said.
Prosecutors said Kluger passed tips to an unnamed co-conspirator about mergers such as Oracle's takeover of Sun Microsystems and Adobe Systems' takeover of Omniture. The co-conspirator would then tip Bauer, who would make trades for all three of them based on the inside information, prosecutors said.
Investigators said the plan was hatched after an Atlantic City, N.J., meeting, in which Bauer agreed to use gambling as a cover story to explain cash withdrawals he was making to funnel illegal profits to Kluger.