THE FIRST GALLEON DEFENDANT IS SENTENCED
Mark Kurland became the first defendant to be sentenced in the Galleon insider trading cases, discussed here. He had previously pleaded guilty to conspiracy and securities fraud. The court sentenced Mr. Kurland to serve twenty seven months in prison followed by two years of probation. He will also forfeit $900,000. Mr. Kurland argued that he played a minor role in the Galleon insider trading cases and should be sentenced to a term of probation. U.S. v. Kurland, Case No. 10-cr-69 (S.D.N.Y.).
Mr. Kurland is a co-founder of New Castle Partners equity hedge fund and served as its Senior Managing Director. The fund had been operated at Bear Stearns Asset Management and then JPMorgan Chase. Galleon co-defendant Danielle Chiesi also was employed at New Castle.
According to the criminal information, in 2008 and 2009 Mr. Kurland participated in a scheme to trade on inside information pertaining to three companies. The scheme involved trading in the securities of Advanced Micro Devices, Inc., Akamai Technologies, Inc. and Sun Microsystems Inc. Ms. Chiesi obtained the inside information from her sources at Akamai and IBM. Trades were then placed in the shares of ADM, Akamai and Sun by New Castle either by Mr. Kurland or with his approval. Only the Sun trades were profitable.
Mr. Kurland is the only defendant in the Galleon cases to have pleaded guilty and not cooperated with law enforcement. Ms. Chiesi is awaiting trial along with Galleon founder Raj Rajaratnam.