A former hedge fund trader was sentenced to 10 years in prison Wednesday after he was convicted earlier this year along with two others in a closely watched insider-trading case.
Federal prosecutors in Manhattan had alleged that Zvi Goffer, a former Galleon Group trader, was the “ringleader” of a scheme to trade ahead of corporate mergers based on confidential information, including information obtained from a law firm working on the deals.
Goffer, 34, was convicted of 14 counts of conspiracy and securities fraud in June, along with his brother and another former trader. His brother and the other trader are awaiting sentencing.
“I thought I was getting an edge in competing with the big hedge funds,” Goffer said prior to sentencing. “I cannot believe that I became part of” the system that was “stacked against investors.”
In court papers, prosecutors had argued Goffer should be sentenced to up to 12 years and seven months in prison, saying in part that he and his co-conspirators earned more than $10 million in illicit profits.
Prosecutors alleged that Goffer allegedly received and passed along tips about deals in which law firm Ropes & Gray LLP was an adviser. The tips came from former Ropes & Gray lawyers Arthur Cutillo and Brien Santarlas, who have both pleaded guilty to criminal charges.
The law firm has said it cooperated with the government’s probe and both men violated the firm’s policies.
Goffer’s lawyers argued in court papers that he should receive a sentence below 10 years in prison, describing their client’s actions as “youthful, impulsive and reckless.”
In a letter to the court as part of his sentencing submission, Goffer said he was waiving his right to appeal and admitted his guilt.
“I know and fully accept the fact that I will be imprisoned for a long time for what I have done,” Goffer said in his letter. “And rather than make empty promises about how I have learned my lesson and will never commit a crime again, I would prefer to make a promise to my family that I will use this opportunity to become a better son, a better husband and a better father.”
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