A stock trader and a lawyer who worked at three prominent law firms were charged in New Jersey on Wednesday with reaping at least $32 million in illicit profits through an insider-trading scheme dating back to the mid-1990s.
Garrett D. Bauer, 43, of New York, and Matthew H. Kluger, 50, of Oakton, Va., were arrested at their homes on Wednesday and are charged with numerous counts that include securities fraud, conspiracy to commit fraud, conspiracy to commit money laundering and obstruction of justice, the U.S. Attorney for New Jersey, Paul J. Fishman, announced in Newark.
Bauer was to appear Wednesday afternoon before a federal magistrate in Newark, while Kluger was expected to go before a federal magistrate in Alexandria, Va., to respond to the charges that could send them to prison for decades upon conviction.
Kluger worked from 1994 to 1997 as a summer associate and later as a corporate associate at Cravath Swaine & Moore LLP in New York. From 1998 to 2001, he worked at Skadden, Arps, Slate, Meagher & Flom as an associate in the corporate department. From December 5, 2005 to March 11, 2011, he worked at Wilson Sonsini Goodrich & Rosati as a senior associate in the mergers and acquisitions department of the firm’s Washington office.
The government said Kluger passed on secret corporate information to another conspirator, who then relayed it to Bauer, a professional trader who used the information to make profitable trades illegally. The suspected conspirator was not named, but the government’s announcement cites recorded telephone conversations, suggesting that investigators had zeroed in on the suspected conspirator some time ago and obtained his or her cooperation.
