inside track —

IT worker who used law firm job for insider trades gets 2 years in prison

Secret info was gathered from a top tech law firm and used to game the markets.

A senior IT professional who was a trusted employee of a top Silicon Valley law firm is headed to prison.

Dimitry Braverman was arrested last year at his home in San Mateo, California. The 42-year-old man was accused of loading up on stocks and options for companies he knew had mergers or other major transactions on the way, because he had access to confidential information at the law firm he worked at, Wilson Sonsini Goodrich and Rosati.

Braverman, who made $305,000 in profits off the illegal transactions, pled guilty in November. The companies he traded on included retailer Gymboree, Drugstore.com, Epicor Software, Seagate Technology, software firm Dealertrack Technologies, storage company Xyratex, and pharmaceutical companies YM Biosciences and Astex Pharmaceuticals.

Wilson Sonsini is one of the best-known names in technology law, having taken now-legendary companies public, including Apple and Google.

Prosecutors asked (PDF) for a sentence of between 30 and 37 months, which they argued was within the range of the guidelines for Braverman's crime.

His lawyer, Silvia Serpe, asked for a sentence of "home confinement and substantial community service," arguing (PDF) that "Mr. Braverman's criminal conduct was a clear aberration," and that her client was "deeply ashamed" and has "tried to be a productive member of society even after his arrest."

Serpe noted that he had agreed to pay $520,433 in reparations to the US Securities and Exchange Commission, substantially more than the profits he made.

US District Judge Paul Engelmeyer said Braverman's crimes were too serious to warrant only home confinement, according to a Reuters report on the sentencing hearing. "It is important when an insider trader gets caught—and a repeated insider trader as here—that a substantial sentence is imposed," the judge said.

Engelmeyer noted that Braverman took a break from his trading in 2011 and 2012 when an associate at his law firm was caught and punished for the same crime, but then later resumed.

"If ever there was a wake up call for you to stop your insider trading, that should have been it," Engelmeyer said.

Channel Ars Technica