Securities and Exchange Commission v. Matthew H. Kluger and Garrett D. Bauer, Case No. 11-cv-1936 (D.N.J. April 6, 2011) (KSH-PS); Securities and Exchange Commission v. Kenneth T. Robinson, Case No. 12-cv-2438 (D.N.J. April 25, 2011) (KSH-PS)
ATTORNEY, WALL STREET TRADER, AND MIDDLEMAN SETTLE SEC CHARGES IN $32 MILLION INSIDER TRADING CASEWashington, D.C., April 25, 2012 – The Securities and Exchange Commission today announced a settlement in a $32 million insider trading case filed by the agency last year against 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 now identified as 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.