Attorney, Wall Street Trader, and Middleman Settle SEC Charges in $32 Million Insider Trading Case

April 25, 2012

The SEC settled an insider trading case with a corporate attorney and a Wall Street trader. The SEC alleged that the insider trading occurred in advance of at least 11 merger and acquisition announcements involving clients of the law firm where the attorney Matthew H. Kluger worked. He and the trader, Garrett D. Bauer, were linked through a mutual friend, Kenneth T. Robinson, who acted as a middleman to facilitate the illegal tips and trades. Kluger and Bauer used public telephones and prepaid disposable mobile phones to communicate with Robinson in an effort to avoid detection. Robinson, now also charged, cooperated in the SEC’s investigation.
Bauer, Kluger, and Robinson each agreed to give up their ill-gotten gains plus interest in order to settle the SEC’s charges. Those amounts under the terms of their consent agreements are approximately $31.6 million for Bauer, $516,000 for Kluger, and $845,000 for Robinson. Subject to court approval of the settlement, Bauer would be ordered to disgorge $30,812,796 plus prejudgment interest of $859,135; Kluger would be ordered to disgorge $502,500 plus prejudgment interest of $14,010; and Robinson would be ordered to disgorge $829,129 plus prejudgment interest of $16,106.
Click here to access the administrative action


Categories

Enforcement Actions, Investment Advisers, Investment Companies