NEW YORK (CNNMoney) -- A 50-year-old attorney who worked at three prominent merger-and-acquisition law firms has been arrested and charged with passing insider information on anticipated deals to a professional stock trader, federal prosecutors said Wednesday.
The insider trading scheme allegedly involving the attorney, Matthew Kluger, and trader Garrett Bauer, 43, earned $32 million over the past five years, according to Paul Fishman, the U.S. Attorney for New Jersey. Kluger and Bauer were charged with securities fraud and conspiracy.
Fishman said the scheme began in 1994. He said Kruger stole and shared information on deals he was working on when he was a corporate associate at Cravath Swaine & Moore and a corporate associate at Skadden Arps Slate Meagher & Flom.
Fishman said that, in 2005, Kruger began working at Wilson Sonsini Goodrich & Rosati. In an attempt to avoid detection by the authorities, Kluger took information from the firm's computer system, rather than information on deals on which he was working, according to Fishman.
The prosecutor said Kluger provided the information to an unnamed coconspirator, and the coconspirator would then pass it to Bauer, who would purchase shares of stock and then quickly sell them after the deal became public knowledge.
Fishman said that, in one particular instance in April 2009, Kluger went into Wilson Sonsini's computer system to get information about Oracle Corp. (ORCL, Fortune 500)'s bid for Sun Microsystems, Bauer then purchased more than 4 million shares of Sun stock and earned more than $11 million.
The three conspirators also took great steps in efforts to hide their tracks, according to the prosecutor. Fishman said they would only talk about the deal on payphones and prepaid cell phones. He said Bauer told the coconspirator to burn $175,000 in cash because of fears his finger prints would be found on the money, while Kluger destroyed his home computer and iPhone.
"The subjects in this case illegally attempted to cover their tracks with the tradecraft of which Gordon Gecko would have been proud," FBI Special Agent in Charge Michael Ward said in a press release, referring to a character in the film "Wall Street" who was involved in insider trading.
UnitedHealth places sharp limits on coverage for laparoscopic or abdominal hysterectomies, following warnings from experts that it poses risks to patients. More
The government of Prime Minister Narendra Modi is set to reveal its second budget, an event so highly anticipated that TV news channels have doubled their advertising rates around Saturday's presentation. More
British fashion company Roman was thrown into the spotlight this week after a debate about #TheDress went viral. More