New Castle Founder Kurland Seeks Probation For Insider-Trading

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.”


In Depth

Why Ponzi Schemes Work: An In-Depth Look At The Allen Stanford Fraud

Dec 21 2014 | 10:30am ET

Texan Allen Stanford first appeared on the radars of financial regulators in 1997...

Lifestyle

Hedgie Funds US Squash Program

Dec 24 2014 | 8:46am ET

Squash, anyone?

Guest Contributor

EidoSearch’s Top Three Market Projections For 2015

Dec 23 2014 | 4:03am ET

It is that time of year again when prognosticators make their big market calls for...

 

Sponsored Content

Editor's Note

    Guidelines for Guest Articles

    Oct 22 2014 | 9:46am ET

    We are always looking for guest articles from hedge fund managers and buy-side firms.

    If you are interested in submitting a contributed piece for possible publication on FINalternatives, please take a look at the specs. Read more…

 

Futures Magazine

December 2014 Cover

Futures 2014 person of the year

Jeff Sprecher was simply looking for a platform to trade energies when launching ICE 14 years ago but it has grown to reach the pinnacle of both the listed futures and equities world.

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.