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If You Want Some Insider Intel From A Client, Get Him Liquored Up

In vino, veritas...and also stock tips. Really illegal stock tips.
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By MichaelGG at English Wikipedia [Public domain], via Wikimedia Commons

By MichaelGG at English Wikipedia [Public domain], via Wikimedia Commons

It’s been a couple of years since we heard about that crazy odd couple Robert Schulman and Tibor Klein.

The former is a lawyer and the latter a money manager, Robert Schulman’s money manager, to be exact. Back in 2010, the two decided to hash out Schulman’s portfolio over a couple of boxes of wine at Schulman’s home, as you do.

At some point, Schulman allegedly slurred, “It would be nice to be King for a day,” presumably with the emphasis on King. With a capital “K.” You know, like the pharmaceutical company I represent? Get it? GET IT?!?!! Klein allegedly got it and bought a few King shares, which wound up earning the dinner daters a cool $24,300 to split between them when Pfizer went out and made King king for a day by buying it.

Alas, Klein couldn’t leave well enough alone. He allegedly bought up some other King shares for other clients, who made some $300,000 on the trade, and allegedly blabbed about things to a buddy, Michael Schechtman, late of Ameriprise Financial, who bought some for himself and made $109,000. He in turn allegedly acknowledged Klein’s generosity with material non-public information by way of a $28,000 “thank you” (which it should be noted is more than Klein and Schulman allegedly made combined.) All told, though, it may have been more trouble that it was worth. First, the SEC sued the winos. Then, Schechtman fessed up. And now, they all might go to jail for a decade or two.

This seems the height of unfairness to Schulman’s lawyer, whose client can’t really be expected not to blurt out cringe-worthy puns about clients who he might have found out were about to be acquired after slapping the bag on a third box of Franzia.

Christopher Mead, a lawyer for Mr. Schulman, said: “I represent an innocent man. The evidence at trial will show it.”

We think we have a pretty good idea of what that evidence will be.

Lawyer, Adviser Charged With Insider Trading [WSJ]


(Cleveland Browns)

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Rob Lavinsky, – CC-BY-SA-3.0 [CC BY-SA 3.0], via Wikimedia Commons

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