Oakton Inside Trader Receives Record Sentence

Matthew Kluger received a record 12-year prison sentence Monday for  that netted more than $37 million in illicit profits over 17 years, Reuters reports.

The Oakton resident's sentence, handed down by U.S. District Judge Katharine Hayden in Newark, N.J., is the longest ever for insider trading. Kluger, who worked for several prestigious firms as a mergers and acquisitions attorney throughout the scheme, to conspiracy to commit securities fraud, securities fraud, conspiracy to commit money laundering and obstruction of justice in December.

Kluger, 51, had two coconspirators — Garrett D. Bauer, 44, of New York, and Kenneth Robinson, 46, of Long Beach, N.Y. — in the insider trading scheme, according to court documents. All three pleaded guilty. Bauer received a nine-year sentence and Robinson received 27 months. 

"The severe sentences imposed today are a warning to anyone trying to game the financial markets for their own enrichment," New Jersey U.S. Attorney Paul Fishman said in a statement Monday.

An attorney representing Kluger told Reuters they would seek an appeal against the sentence.

The trio began the insider trading scheme in 1994. Kluger, an attorney with mergers and acquisitions firms, would disclose information available to him about corporate mergers to Robinson, who would pass the information to Bauer, a stock trader. Bauer would purchase the stocks for the three of them in his own trading account, then sell them once the deal was publicly announced.

Kluger worked for Cravath Swaine & Moore from 1994 until 1997; Skadden, Arps, Slate, Meagher & Flom from 1998 until 2001; and Wilson Sonsini Goodrich & Rosati from 2005 until 2011. Authorities believe Kluger participated in the insider trading scheme during his time at those three firms.