Oakton Man Admits to Insider Trading Scheme

Matthew H. Kluger, of Oakton, pleaded guilty today that netted more than $37 million in illicit profits over 17 years.

Kluger, 50, admitted to conspiracy to commit securities fraud, securities fraud, conspiracy to commit money laundering and obstruction of justice before a U.S. district court in Newark.

"Not only did Matthew Kluger defraud the investing public, he betrayed the colleagues and clients who depended on his confidentiality in some of the biggest deals of the last decade," U.S. Attorney Paul Fishman said. "In order to be confident in our markets, investors must have comfort that those with inside information won’t abuse positions of trust for personal gain."

As part of his guilty plea agreement, Kluger will forfeit $415,000, the approximate amount he obtained from recent transactions in the scheme. His sentencing is scheduled for April 9.

Kluger had two coconspirators — Garrett D. Bauer, 44, of New York, and Kenneth
Robinson, 45, of Long Beach, N.Y. — in the insider trading scheme, according to court documents. All three have now pleaded guilty.

The trio began the insider trading scheme in 1994. Documents say Kluger, an attorney with mergers and acquisitions firms, would disclose information available to him about corporate mergers to Robinson, who would pass the information to Bauer, a stock trader. Bauer would purchase the stocks for the three of them in his own trading account, then sell them once the deal was publicly announced.

Kluger worked for Cravath Swaine & Moore from 1994 until 1997; Skadden, Arps, Slate, Meagher & Flom from 1998 until 2001; and Wilson Sonsini Goodrich & Rosati from 2005 until 2011. Authorities believe Kluger participated in the insider trading scheme during his time at those three firms.