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Insider-trading trio to pay SEC $33M

A stock trader, a lawyer and a mortgage

A stock trader, a lawyer and a mortgage broker who all pleaded guilty to an insider-trading scheme that spanned 17 years have agreed to pay $33 million to resolve a U.S. Securities and Exchange Commission lawsuit, it was reported Wednesday. Photo Credit: iStock

A stock trader, a lawyer and a mortgage broker who all pleaded guilty to an insider-trading scheme that spanned 17 years agreed to pay $33 million to resolve a U.S. Securities and Exchange Commission lawsuit.

Stock trader Garrett D. Bauer, who already forfeited homes in Manhattan and Boca Raton, Fla., will pay $31.7 million.

Mortgage broker Kenneth T. Robinson, of Long Beach, will pay $845,235.

Attorney Matthew H. Kluger will pay $516,510, according to a statement by the SEC. The agency sued the men in the federal court in Newark where they pleaded guilty last year.

They admitted Kluger stole nonpublic data on about 30 corporate transactions while working at four law firms, including Skadden, Arps, Slate, Meagher & Flom Llp and Wilson, Sonsini, Goodrich & Rosati Pc. Kluger passed tips to Robinson, who gave them to Bauer, who made trades. The companies included Sun Microsystems Inc., 3Com Corp. and Acxiom Corp.

The men consented to final judgments that are subject to a judge's approval, according to the statement. Bauer has agreed to a bar on working as a broker, while Kluger agreed that he won't appear before the SEC as an attorney. All three men are scheduled to be sentenced on June 4 in Newark.

Bauer already forfeited about $20 million in bank accounts and trading accounts, as well as the homes. He declined to comment on the SEC statement.

"In his efforts to resolve the insider-trading charges with the Securities and Exchange Commission, Mr. Bauer has agreed to make full disgorgement of the gross profits that he made," said Bauer attorney Michael Bachner.

Robinson attorney Francis J. Murray and Kluger attorney Alan Zegas didn't immediately return calls seeking comment.

Robinson, 45, was a mortgage broker who secretly recorded Kluger and Bauer for the U.S. Federal Bureau of Investigation. All three were criminally charged in April 2011. The SEC sued Kluger and Bauer last year and filed a complaint against Robinson Wednesday.

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