D.C. lawyer pleads guilty to securities fraud
Kluger, 50, was charged with stealing and passing to co-conspirators inside information from some of the nation’s most prominent corporate law firms, where he was employed — Cravath Swaine & Moore, Skadden Arps, Fried Frank, and Wilson Sonsini. The scheme lasted 17 years and netted more than $37 million in illicit profits, the U.S. attorney’s office in Newark, N.J., said.
Kluger’s lawyer, Alan Zegas, said Kluger received less than $2 million but thought he was being given roughly a third of the proceeds. Kluger was not told the extent of the trades placed by one of his associates in the scheme, Zegas said.
Two co-conspirators previously pleaded guilty.
In a recorded phone call in March, when investigators were closing in, Kluger told the middleman to get rid of a phone he had used, saying, “I really would like to see this phone go bye-bye ASAP, like maybe tonight if you can . . . . Do you want this to be our undoing?”
According to a court filing, Kluger was also recorded saying that he got rid of his computer and an iPhone he had used to look up stock quotes.
“Those are gone. I mean history,” he said.
Kluger “regrets what he has done, and one of the reasons for entering into the plea agreement was to begin the process of rehabilitation,” Zegas said.
Kluger has given the government information about others he had reason to believe may have engaged in insider trading, including a lawyer, Zegas said.
He has agreed to forfeit $415,000, “the approximate amount that he obtained from recent transactions in the scheme,” the U.S. attorney’s office said in a news release.
Kluger, who lives in Oakton and has three young children, is scheduled for sentencing in April.