Zvi Goffer, Former Trader, Gets Prison Sentence For Insider Trading

NEW YORK (Reuters) - A former securities trader was sentenced to 10 years in prison on Wednesday after being found guilty of insider trading as part of the government's campaign against financial crimes on Wall Street.

Zvi Goffer, 34, was convicted by a Manhattan federal court jury in June on all counts of fraud and conspiracy to commit insider trading on pending mergers.

The case was part of a wide-ranging insider trading investigation focused on hedge funds and traders, a probe marked by the use of FBI wiretaps.

U.S. District Judge Richard Sullivan said Goffer forfeited any claim to leniency by choosing to go to trial rather than admitting his crimes, as many of his co-defendants in the investigation elected to do.

"You gambled and you lost," Sullivan said.

The judge also repeated his call on Wall Street to heed the message that insider trading can carry a stiff sentence.

"Insider trading is very, very hard to detect and because of that has to be dealt with harshly," he said.

Prosecutors called Goffer, who once worked at Raj Rajaratnam's Galleon Group hedge fund firm, the ringleader of a scheme to trade on tips about pending takeovers of computer network equipment maker 3Com Corp and Canadian drug company Axcan Pharma Inc.

He was known as "Octopussy," after the James Bond film, for his many sources of information.

Rajaratnam is due to be sentenced next week in Manhattan federal court.

Goffer was convicted along with his brother Emanuel Goffer and a third trader, Michael Kimelman. Both are scheduled to be sentenced next month.

U.S. District Judge Jed Rakoff was due to sentence former technology company consultant Winifred Jiau later on Wednesday. She was also convicted in June and the government has called on the judge to hand her a 10-year sentence.

The case is USA v Zvi Goffer et al, U.S. District Court for the Southern District of New York, No. 10-00056.

(Reporting by Basil Katz; editing by Tim Dobbyn and Andre Grenon)

Copyright 2011 Thomson Reuters. Click for Restrictions.

Comments

[elamatt]

11:47 PM on 09/22/2011

Call me naive, but HOW does a 34 yr old, still "wet behind the ears" professionally GET into a position to do that much damage?? The 34 yr olds in my family--college educated--are in management, but have NOT been handed the "keys" to the "golden-egg laying hens' house"!! Have all the traders gone mad in this country???

[BillKen]

04:00 PM on 09/22/2011

Zvi, I'm sorry you are such a low level criminal that you have to go to jail. You have to remember, criminality as a behavior is acceptable in the USA but if you're going to do
the crime make sure it's a major crime, so you don't have to do any time.
Semper Fi

[BassMonk]

03:49 PM on 09/22/2011

Insider stock trading is legal for members of the U.S. Congress.

[framah]

03:33 PM on 09/22/2011

That's the sort of face you want to beat the living poop out of!!

[teachone]

02:58 PM on 09/22/2011

The American people want to see the crooked bankers and investment companies held accountable, as this young man was, the law is not intended for only a few, but for ALL!!!!!!

[Barbarian At The Gate]

01:13 PM on 09/22/2011

Go to jail Octopussy, you'll never get your license back.

[jwilson1]

09:41 AM on 09/22/2011

When you have a trading firm that is corrupt why should any of the employees be any different?
Everyone out for himself and screw the clients. Goldman and the others believe this just business as uaual so when it happens to them they are not surprised.
Corruption left unchecked grows and grows.

[paddlerchick]

08:28 AM on 09/22/2011

It's amazing how greed and the frantic desire to accumulate money makes these guys do anything. They should all go to jail and never be allowed to work in finance in any capacity.

[zatgy]

08:28 AM on 09/22/2011

I'm wondering if the traders that are cheating are betting that their odds at getting caught are still low enough to continue to cheat since they might even calculate possible outcomes if they do get caught.

[iam99]

05:44 AM on 09/22/2011

The elephant in the room, naked shorting, a fraud that exist only to destroy value. It has worked perfectly. Where has the SEC been on this?
Hello, anybody home?

[Jack Daniels Esq]

04:30 AM on 09/22/2011

Why doesnt the DoJ nail all our Wall St Bankstas - jail them for hundreds of years
Oh - my bad - we dont want to jail Obamy & Timmy - rather let them bankrupt us

[Igotit]

02:15 AM on 09/22/2011

I wonder if he's still smiling?

[zatgy]

08:31 AM on 09/22/2011

If he has hidden assets he might just be smiling when he gets ready to get out of jail.

[dayzee10]

01:35 AM on 09/22/2011

How much did he steal?

[Cindy Russell444]

12:59 AM on 09/22/2011

And he kind of looks like Al Gore.

[Cindy Russell444]

12:58 AM on 09/22/2011

This guy's smirk...he has "I'm crooked as the day is long" written all over his face. Some people just ooze creepiness.