Plea Entered in NY in Massive Insider Trading Case

A former senior managing director at New Castle Partners hedge fund pleaded guilty Wednesday to securities fraud charges, admitting making $900,000 through inside trades in what authorities have said was the largest hedge fund insider trading case in history.

Mark Kurland, 61, of Mount Kisco, N.Y., remained free on $3 million bail after entering the plea in U.S. District Court in Manhattan. Kurland pleaded guilty to conspiracy to commit securities fraud and securities fraud three months after his October arrest.

Though the charges carry a potential maximum prison sentence of 25 years, Kurland’s plea agreement recommended that he spend between two-and-a-half years and three years in prison.

Kurland was the eighth person to plead guilty in a case that has resulted in charges against 21 people so far. They are accused of making tens of millions of dollars through inside trades.

At the center of the case is Raj Rajaratnam, the portfolio manager for the Galleon Group hedge fund who has been accused of pocketing as much as $50 million through a network of cheating executives at financial firms and companies privy to inside information.

Rajaratnam’s lawyer, John Dowd, has said his client looks forward to a trial to clear his name. Dowd has accused prosecutors of misrepresenting and misinterpreting conversations gleaned as a result of wiretaps, a tactic prosecutors say was unprecedented in a hedge fund case.

He also has disputed claims that Rajaratnam is a billionaire who is accurately ranked by Forbes magazine as being among the richest people in the world.

During his plea, Kurland admitted that he engaged in insider trading between August 2008 and January 2009.

“I knew that the inside information was received from a source who had an obligation to keep it confidential,” Kurland said.

Kurland’s plea deal called for him to forfeit $900,000, the proceeds of his crimes. A tentative sentencing date was set for April 27.

Source

This entry was posted on Saturday, January 30th, 2010 at 10:59 pm and is filed under Insider Trading. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.