10 Years For Zvi Goffer For Insider Trading
Zvi Goffer has been sentenced in Manhattan federal court to 10 years in prison for his participation in an insider trading scheme in which he obtained and traded on material, nonpublic information ("Inside Information"), including information misappropriated from the Ropes & Gray law firm. Following a four week jury trial, Goffer was convicted in June on all counts against him, including 12 counts of securities fraud and two counts of conspiracy to commit securities fraud.
According to the indictment, a complaint previously filed in this case, and the trial evidence:
In 2007 and 2008, Zvi Goffer led an insider trading ring that obtained privileged and confidential information from two attorneys, Arthur Cutillo and Brien Santarlas, about mergers and acquisitions of public companies. Goffer and his coconspirators traded on this Inside Information and earned over$10 million in illegal profits. The Inside Information included the potential acquisition of 3Com Corporation ("3Com") and the potential acquisition of Axcan Pharma, Inc. Goffer obtained the inside information from Cutillo and Santarlas through Jason Goldfarb, an attorney at another law firm who acted as an intermediary. Goffer then traded on the information and provided the information to other co-conspirators. Following the announcement of the 3Com acquisition, Goffer paid approximately$75,000 to Cutillo, Santarlas, and Goldfarb. Following the announcement of the Axcan acquisition, Goffer paid approximately $22,500 to Cutillo, Santarlas, and Goldfarb. In an effort to avoid detection by law enforcement, Goffer distributed prepaid cellular telephones to Cutillo, Santarlas, Goldfarb and other conspirators.
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In addition to the prison term, Goffer was sentenced to three years of supervised release. He was also ordered to pay forfeiture in the amount of$10,022,931, and a $1,400 special assessment fee.
Cutillo, Goldfarb, and Santarlas previously pleaded guilty to conspiracy and securities fraud charges in connection with this scheme. Cutillo and Goldfarb were sentenced to 30 months and 36 months in prison, respectively. Santarlas is scheduled to be sentenced on October 28, 2011, at 2:30 p.m.