Two Guys Arrested In Insider Trading Scam That (Allegedly) Used Info Stolen From Law Firms

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The trader and lawyer duo have apparently been going at it for "decades."

A lawyer and a trader have been charged in a $32 million insider-trading scheme that revolved around the theft of information from three prominent law firms, federal prosecutors said Wednesday. Matthew Kluger, who most recently worked at Wilson Sonsini Goodrich & Rosati, and Garrett Bauer, a trader, have been arrested in the decades-long scheme. The information was passed by Mr. Kluger to a third co-conspirator, who then gave it to Mr. Bauer. Information was stolen from Wilson Sonsini, as well as Cravath Swaine & Moore and Skadden, Arps, Slate, Meagher & Flom.‬ Mr. Kluger for all three firms at various times.

Two Charged In $32 Million Insider Trading Case [WSJ]

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Connection To A Company Called "Yeah Baby" Not Even The Best Part Of "High School Buddies" Insider Trading Scam

Over the past several years, much has been made about the supposed incompetence of the Securities and Exchange Commission. The regulator failed to realize Bernie Madoff had been running an illegitimate Ponzi scheme, despite more or less being told by Bernie Madoff himself, "I am running an illegitimate Ponzi scheme." It went after David Einhorn, when it should have been going after Allied Capital, the company the hedge fund manager told them was committing fraud. Its proposal for stepping up investigators' games was to start a Fraud College.* Until recently, it employed individuals in the office responsible for "ensuring exchanges follow guidelines concerning...computer audits, security, and capacity" who had "little or no experience with exchange technical matters." At this point, there have been so many stories about the SEC getting things wrong that the default is to assume it fucked up, even when that is not actually the case. What's more, even when Team Schapiro is on top of its game, resources are so strained that many scams that should be caught fall through the cracks. So you can maybe understand why a group of "high school buddies," along with a few other guys they picked up along the way, who were engaging in securities fraud, weren't too worried about getting caught.