Hedge fund trader Emanuel Goffer was sentenced to 3 years on Friday, October 7 for insider trading by US District Judge Richard Sullivan. Goffer was also required to forfeit the $761,000 he is believed to have profited from the scam and serve three years of supervised release after he serves his prison term.
Federal guidelines would have required the judge to sentence Goffer to a term of 41 to 51 months but Judge Sullivan showed Goffer leniency on the basis that it was Goffer’s brother, Zvi, who encouraged him to participate in the insider trading. Zvi had been sentenced to 10 years by the same judge last month.
Emanuel Goffer was convicted of insider trading in June. According to the Associated Press, Goffer and his brother Zvi were convicted for “leading a scheme in which two lawyers at a Manhattan law firm were paid $30,000 each to report information about mergers and acquisitions of public companies before they were announced publically (sic).” They were most interested in “3Com Corp., Axcan Pharma Inc., Kronos Inc. and Hilton Hotels Corp. Goffer’s role was that he had “helped pay bribes to two lawyers who provided insider information, communicated tips to his brother by using an untraceable prepaid cell phone and made legitimate securities trades meant to disguise the illegal trades that were going on.”
Judge Sullivan was careful to point out that the type of insider trading the Goffer brothers were involved in is very different from the insider trading of which Raj Rajaratnam and others like him have been convicted. The Goffer brothers deliberately set about to obtain information illegally.
A third man, Michael Kimelman, was also involved. He is currently awaiting sentencing. Zvi had worked for Raj Rajaratnam’s Galleon Group before starting Incremental Capital LLC with his brother Emanuel and Kimelman.