'Octopussy' Sentenced To 10 Years In Prison For Insider Trading


New York - Zvi Goffer, the former Galleon Group trader known as 'Octopussy' for his sprawling connections to an insider network, has been sentenced to 10 years in prison for insider trading

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.

Manhattan U.S. Attorney Preet Bharara said: 'Today’s sentence is a fitting conclusion to yet another sordid chapter in the illegal insider trading conspiracies that have become so alarmingly pervasive. Unfortunately, it is not the final chapter'.

According to the Indictment, a Complaint previously filed in this case, and the trial evidence:

In 2007 and 2008, 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 co- conspirators traded on this Inside Information and earned over $10m in illegal profits. The Inside Information included the potential acquisition of 3Com Corporation ('3Com') and the potential acquisition of Axcan Pharma, Inc., ('Axcan').

Goffer obtained the inside information from Cutillo and Santarlas through Jason Goldfarb, an attorney at another law firm who acted as an intermediary. Gofffer 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 them. In an effort to avoid detection by law enforcement, Goffer distributed prepaid cellular telephones to Cutillo, Santarlas, Goldfarb and other conspirators.

In addition to the prison term, Judge Sullivan sentenced Goffer, 34, to three years of supervised release. He was also ordered to pay forfeiture.

Cutillo, Goldfarb, and Santarlas previously pled 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 in October.

Source - The US Justice Department

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