Insider-Trader Kimelman Sentenced On Eve Of Rajaratnam Reckoning

Oct 12 2011 | 1:18pm ET

He could have spent no time in jail at all. Instead, Michael Kimelman, convicted in the Galleon Group insider-trading scandal, could do more than two years hard time.

Kimelman, a former trader at hedge fund Incremental Capital, was sentenced to two-and-a-half years in prison today for his role in the scandal. He was convicted in June of conspiracy and securities fraud alongside Zvi Goffer, a former Galleon trader who led one of two interlocking insider-trading rings, and his brother, Emanuel Goffer.

Zvi Goffer was sentenced to 10 years in prison and Emanuel to three.

"I am ready to pay the price and face the consequences for my decision," Kimelman said today in court.

Kimelman has a few things to regret: both his participating in the scheme, and his refusal to take a no-jail plea deal offered by prosecutors before the trial. Kimelman's lawyers then failed in their effort to tell jurors about that refusal, which they said "is probative of a state of mind devoid of guilty knowledge."

Kimelman's sentencing served as something of a prelude to that of the most important member of the Galleon ring, Galleon founder Raj Rajaratnam. Rajaratnam will be sentenced tomorrow; the former billionaire faces up to 24 years and five months in prison.


In Depth

Q&A: Brevan Howard’s Charlotte Valeur Talks Strategy

Sep 18 2014 | 11:18am ET

Charlotte Valeur chairs the board of Brevan Howard Credit Catalysts, an LSE listed...

Lifestyle

Hedgies Rock Out For Children's Charity

Sep 15 2014 | 8:40am ET

It's that time of year again—when hedgies trade in their spreadsheets for guitars...

Guest Contributor

Volkered: How Financial Sector Reforms are Creating Opportunities for Hedge Funds

Sep 16 2014 | 11:28am ET

New regulations have dramatically curtailed proprietary trading activity in investment...

 

Editor's Note

    Get A Sneak Peak Of The Alpha Pages

    Aug 25 2014 | 11:21am ET

    As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…

 

Futures Magazine

September 2014 Cover

The London Whale: Rogue risk management

Credit default swaps brought down the London Whale and cost JPMorgan $6.2 billion. Here is how it happened.

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.