“I mean, the fact is we did something wrong.” And I am on edge all night thinking that they’re coming in,” Bauer allegedly said in a March 18 call. “I am waiting for the FBI to ride into my apartment. it could get ugly,” Kluger said in a March 17 call, according to federal officials. “If they start looking at me and look at my bank records and all that other stuff. The government quoted extensively from the recordings in the charges against Bauer and Kluger. The FBI and the Internal Revenue Service visited Robinson’s home early last month, and soon conversations between Robinson and his alleged partners were being recorded with Robinson’s consent. Kluger worked for some of the nation’s most prominent corporate law firms: Cravath Swaine & Moore Skadden, Arps, Slate, Meagher & Flom Fried, Frank, Harris, Shriver & Jacobson, and most recently Wilson Sonsini Goodrich & Rosati, where until weeks ago he worked in the Washington office. Robinson and Bauer were already on the government’s radar when Robinson invited closer scrutiny by trading on his own, the source said, speaking on the condition of anonymity to discuss details not spelled out in court papers.īut it was Robinson who exposed Kluger as the origin of the inside information, the source said. Robinson, a Long Island resident, was once registered as a trader but worked primarily in the mortgage business, the government said. The charges could bring up to 45 years in prison and fines of more than $10 million, but under a plea agreement, the government is recommending a prison sentence of 70 to 87 months. Robinson, 45, previously identified in court papers as “Coconspirator 1,” was unmasked as the alleged middleman Monday, when he pleaded guilty to securities fraud and conspiracy. Kluger with collaborating in a 17-year scheme that netted more than $32 million since 2006 alone. ![]() That lapse gave investigators a big break, and it ultimately led them to his door, a source familiar with the investigation said Monday.īased in part on Robinson’s cooperation, the Justice Department and the Securities and Exchange Commission last week charged trader Garrett D. And, by serving as the go-between for the lawyer who was the source of the tips and the trader who acted on them, the government says, he made it less likely that law enforcement would connect the dots.īut in 2009 and again last year, he let his guard down and placed trades on his own, leaving himself more vulnerable to detection. ![]() To collect his share of the profits, the government says, he sometimes met the trader in Atlantic City, where gambling could provide an alibi for cash withdrawals. He conveyed information about corporate deals from a Washington lawyer to a New York trader using pay phones and prepaid cellphones, the government says. Robinson took care to stay under the government’s radar. As the middleman in an alleged insider trading conspiracy, Kenneth T.
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