Summary: Wilson Sonsini has a second employee charged with inside trading.
How much of a deterrent is the federal government’s crackdown on insider trading in hedge funds? Now that a second employee of Wilson Sonsini Goodrich & Rosati has been arrested, we see that it may be ineffective. Dmitry Braverman, an information technology employee with Wilson Sonsini,was charged Tuesday for profiting $287,000 in illegal trading.
A close look at his activities show that he did pause his illegal practices when a former Sonsini employee was arrested for inside trading, and pled guilty to a 17-year conspiracy that netted him $32 million. Braverman closed out their trades in April of 2011, when all this went down, but by November was back at it with a new brokerage account. Perhaps witnessing his fellow employee, Matthew Kluger, receive one of the steepest sentences for inside trading – 12 years in prison – only made him a bit more cautious.
Braverman has been charged with one count of securities fraud by a federal court in Manhattan. It seems he used his firm’s computer database to look into their list of conflicts of interest, to figure out what mergers and deals he could bank upon.
Braverman, 41, has deeply upset the firm, to say the least. “Client confidentiality is at the center of all we do and we have strict policies and internal controls established to protect it,” said Courtney Dorman, a spokesman for the firm, as reported by the Wall Street Journal. “We have and will continue to provide our full support to the federal investigation.”
Braverman used his confidential information about the firm’s clients to bank on Dealertrack Technologies Inc. and Xyratex Ltd – and a total of eight companies.
“Today’s charges against a staff member are deeply disturbing to say the least,” said Dorman.
Braverman was put on unpaid administrative leave after his arrest.