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Octopussy Gets 10 Years In Prison for Insider Trading
September 22, 2011
Zvi Goffer, a former securities trader known as "Octopussy" because of his many sources of information, was sentenced to 10 years in prison despite having expressed tearful remorse for his crimes. Prosecutors, called Goffer the ringleader of a scheme to trade on tips about pending takeovers and suggested a term of 10 to 12-1/2 years. Goffer also was ordered to pay $10 million in forfeiture and must turn himself in for prison on October 21.
During the sentencing, U.S. District Judge Richard Sullivan said the former trader forfeited any claim to leniency by choosing to go to trial rather than admitting his crimes, as many of his co-defendants in the investigation elected to do. "You gambled and you lost," Judge Sullivan told Goffer, 34, who was convicted in June of trading on inside information about pending mergers. The judge also renewed a call to Wall Street to heed the message that insider trading can carry a stiff sentence.
"Insider trading is very, very hard to detect and because of that has to be dealt with harshly," he said.
Speaking at his sentencing, Goffer apologized tearfully to regular investors, who lacked his unfair advantage, and to his family. His nickname, "Octopussy," came from a character in the 1983 James Bond movie of the same name. A dual Israeli-U.S. citizen, Goffer was convicted along with his brother Emanuel Goffer and a third trader, Michael Kimelman. Both are scheduled to be sentenced next month.
What This May Mean For Rajaratnam. Experts said Goffer's sentence could mean a long term for Rajaratnam, the biggest target of the government's probe of insider trading by hedge funds. "It will make Rajaratnam's lawyers worried," said Lawrence Lustberg, a partner at Gibbons. Rajaratnam's attorneys "are going to have to explain how Goffer's sentence does not demand a very long sentence in Rajaratnam's case."
Federal prosecutors have asked for a sentence of between 19-1/2 years and 24-1/2 years, for Rajaratnam, reflecting nonbinding federal sentencing guidelines. Sentencing had been set for 9/27, but was postponed to 10/13 - no reason for the postponement was given. [Reuters, 9/21/11]
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