Tuesday, 26 July 2016
Last updated 39 min ago
May 11 2010 | 12:51pm ET
New Castle Partners founder Mark Kurland has asked a judge for mercy when he is sentenced for his role in the Galleon Group insider-trading scandal.
A lawyer for Kurland, Patrick Smith, has asked a judge to impose probation for Kurland’s “minor” part in the largest insider-trading case in U.S. history. Kurland pleaded guilty in January to conspiracy and securities fraud and is set to be the first person in the Galleon case to be sentenced, on May 27.
Kurland faces up to two-and-a-half-years in prison. But Smith argued that probation will suffice, despite the fact that his client has refused to cooperate with investigators, because Kurland did not personally profit from the scheme.
“Mark personally earned nothing and it was never part of any plan or discussion he would,” Smith wrote to U.S. District Judge Victor Marrero. Smith added that the $900,000 New Castle earned on one of the trades was “of no consequence to the performance of a portfolio of approximately $1 billion.”
While Kurland has not cooperated and did not implicate anyone else in his plea, he throws two of the 20 other people charged in the case under the bus in his sentencing brief.
Smith said Kurland knew that the information he received from Danielle Chiesi, another former New Castle executive and Galleon founder Raj Rajaratnam’s co-defendant in the case, was confidential, and even listened in on a telephone call between Chiesi and one of her alleged tipsters, former IBM executive Robert Moffat.
“Chiesi was an advocate for her trading ideas,” Smith wrote. “Regrettably, Mark permitted some of these discussions with Chiesi to go too far. Chiesi gave to Mark what he knew to be misappropriated material non-public information concerning three companies.”
Smith added, “Chiesi is responsible for involving him in the unlawful inside trading conspiracy. Mark is significantly less culpable than Chiesi and Moffat.”
Chiesi has pleaded not guilty in the case and is set to go on trial in October. Moffat pleaded guilty to conspiracy and securities fraud charges in March.
Smith called Kurland’s actions “the worst decision of his life.”
“He destroyed the career and reputation he had carefully built over 25 years by allowing the funds he managed to trade while he had inside information about three companies.”