Arthur Cutillo, a 34-year-old former New York patent lawyer, has been sentenced to 30 months in prison for his role in an insider trading scheme.
Cutillo was arrested in November 2009 as part of a wide-reaching crackdown on Wall Street wrongdoing undertaken by the federal government's Financial Fraud Enforcement Task Force. In January 2011, Cutillo pleaded guilty to conspiracy and securities fraud.
According to the FBI, Cutillo and his colleague Brien Santarlas were privy to confidential information regarding mergers and acquisitions involving clients of their law firm, Ropes & Gray LLP. The two attorneys leaked word of deals such as 3Com Corporation's acquisition of Axcan Pharma to Jason Goldfarb, also a New York lawyer, who passed on the information to hedge fund manager Zvi Goffer.
U.S. District Judge Richard Sullivan chastised Cutillo at his sentencing, saying he had been greedy in trying to supplement his already substantial income through illegal avenues, the Wall Street Journal reports. Sullivan ordered Cutillo to forfeit nearly $400,000 he made through payoffs for his tips to Goldfarb and Goffer.
Many lawsuits have resulted from the insider trading round-up conducted earlier this year. Recently, a judge ruled former Goldman Sachs Group director Rajat Gupta can sue the U.S. Securities and Exchange Commission in relation to how the agency treated him while investigating a high-profile case of securities fraud at the Galleon Group hedge fund.