Robert M. Freeman

Last updated

Robert M. Freeman (born ~1943)[ citation needed ] is an American stock broker and convicted felon who was a Goldman, Sachs & Co. partner. Freeman admitted to trading on inside information and pled guilty to mail fraud in 1989. [1]

The head of arbitrage at Goldman Sachs & Co., he was identified as a possible target in an insider trading scandal in November 1986, [2] and arrested on February 12, 1987. [3] The case was prosecuted by Rudolph Giuliani, then United States Attorney for the Southern District. According to the prosecutor, the case involved insider-trading information bought by Ivan Boesky from Martin A. Siegel, of Kidder, Peabody, who in turn got his information from Freeman. [4] Freeman eventually pleaded guilty to one count of mail fraud, served four months in Federal Prison Camp, Pensacola at Saufley Field, Florida. [5] On June 7, 1993, he agreed with the SEC to a three-year suspension from the securities industry and to surrender $1.1 million, in connection with the 1986 leveraged buyout of Beatrice Companies Inc. by Kohlberg Kravis Roberts. [6]

In 2011, New York Times blogger William D. Cohan wrote that Freeman was an innocent victim of a prosecutorial "witch hunt," whose mail fraud conviction was unconnected to any insider trading. [5] In reply, Seeking Alpha author Jonathan Bernstein described Freeman as a "guilty bystander" in the search for evidence against Ivan Boesky and Michael Milken. According to Bernstein, Freeman's mail fraud conviction "was actually about insider trading". [7]

Related Research Articles

<span class="mw-page-title-main">Michael Milken</span> American financier (born 1946)

Michael Robert Milken is an American financier. He is known for his role in the development of the market for high-yield bonds, and his conviction and sentence following a guilty plea on felony charges for violating U.S. securities laws. Milken's compensation while head of the high-yield bond department at Drexel Burnham Lambert in the late 1980s exceeded $1 billion over a four-year period, a record for U.S. income at that time. With a net worth of US$6 billion as of 2022, he is among the richest people in the world.

<span class="mw-page-title-main">Goldman Sachs</span> American investment bank

The Goldman Sachs Group, Inc. is an American multinational investment bank and financial services company. Founded in 1869, Goldman Sachs is headquartered in Lower Manhattan in New York City, with regional headquarters in many international financial centers. Goldman Sachs is the second-largest investment bank in the world by revenue and is ranked 55th on the Fortune 500 list of the largest United States corporations by total revenue. In the Forbes Global 2000 of 2024, Goldman Sachs ranked 23rd. It is considered a systemically important financial institution by the Financial Stability Board.

Ivan Frederick Boesky was an American stock trader known for his prominent role in an insider trading scandal in the mid-1980s. He pleaded guilty, was fined a record $100 million, served three years in prison, and became a government informant.

The U.S. attorney for the District of New Jersey is the chief federal law enforcement officer in New Jersey. On December 16, 2021, Philip R. Sellinger was sworn in as U.S. Attorney. The U.S. District Court for the District of New Jersey has jurisdiction over all cases prosecuted by the U.S. attorney.

<span class="mw-page-title-main">Dennis Levine</span> American investor and white-collar criminal

Dennis B. Levine is a corporate consultant and former investment banker. He was a managing director at the investment banking firm Drexel Burnham Lambert in the 1980s. Levine was one of the first of several high-profile insider trading defendants in the Wall Street insider trading investigations of the mid-1980s. As a result of the investigation by and subsequent proceedings, Levine pleaded guilty.

<span class="mw-page-title-main">Rajat Gupta</span> Indian-American business executive (born 1948)

Rajat Kumar Gupta is an Indian-American business executive who, as CEO, was the first foreign-born managing director of management consultancy firm McKinsey & Company from 1994 to 2003. In 2012, he was convicted of insider trading and spent two years in prison. Gupta was a board member of corporations including Goldman Sachs, Procter & Gamble and American Airlines, as well as an advisor to non-profit organizations such as the Bill & Melinda Gates Foundation and The Global Fund to Fight AIDS, Tuberculosis and Malaria. He is the co-founder of the Indian School of Business, American India Foundation, New Silk Route and Scandent Solutions.

Martin A. Siegel is an American former investment banker who was convicted, along with Ivan Boesky and Michael Milken, for insider trading during the 1980s.

William David Cohan is an American business writer.

The Reebok insider trading case was an insider trading scheme that took place in 2004 and 2005 and involved tips from a Merrill Lynch investment banker, confidential information from Business Week and a grand juror, and trades by individuals in both the United States and Europe. The trades were largely orchestrated by David Pajčin, an ex-Goldman Sachs trader who was subsequently ordered to pay nearly $28 million in fines and judgments by the SEC.

<span class="mw-page-title-main">Raj Rajaratnam</span> American investments manager

Rajakumaran Rajaratnam is a Sri Lankan-American former hedge fund manager and founder of the Galleon Group, a New York-based hedge fund management firm. He is also the author of his memoir, Uneven Justice: The Plot to Sink Galleon.

<span class="mw-page-title-main">Galleon Group</span> American hedge fund caught insider trading (1997–2009)

The Galleon Group was one of the largest hedge fund management firms in the world, managing over $7 billion, before closing in October 2009. The firm was the epicenter of a 2009 insider trading scandal which subsequently led to its fall.

Sergey Aleynikov is a former Goldman Sachs computer programmer. Between 2009 and 2016, he was prosecuted by NY Federal and State jurisdictions for the same conduct of allegedly copying proprietary computer source code from his employer, Goldman Sachs, before joining a competing firm. His first prosecution in federal court in New York ultimately resulted in acquittal by the United States Court of Appeals for the Second Circuit. The outcome of his second prosecution and trial in New York state court was a split verdict dismissed by court, which acquitted him on all counts. One count in that order of dismissal was later overturned by New York Court of Appeals, which took a very broad interpretation of the statute, and on recommendation of prosecutors he was sentenced to time served without punishment. The same New York Court of Appeals denied his petition to appeal on double jeopardy grounds. His story inspired Michael Lewis's bestseller Flash Boys.

<span class="mw-page-title-main">Preet Bharara</span> American lawyer and former federal prosecutor (born 1968)

Preetinder Singh Bharara is an Indian-born American lawyer and former federal prosecutor who served as the United States Attorney for the Southern District of New York from 2009 to 2017. He is currently a partner at the law firm Wilmer Cutler Pickering Hale and Dorr. He served as an Assistant U.S. Attorney for five years prior to leading the Southern District of New York.

Anil Kumar is an Indian-American former senior partner and director at management consulting firm McKinsey & Company, where he co-founded McKinsey's offices in Silicon Valley and India and created its Internet practice among others. Kumar is additionally the co-founder of the Indian School of Business with Rajat Gupta and the creator of two different kinds of outsourcing. He graduated from IIT Bombay in India, Imperial College in the UK, and The Wharton School in the US.

Steven Neil Posner was an American corporate raider who worked together on a number of major hostile takeovers with his father, Victor Posner, though the two would later have a falling out that resulted in a series of acrimonious lawsuits. A 1989 corporate takeover staged by the Posners led to fraud convictions for Ivan Boesky and Michael Milken levied by the United States Securities and Exchange Commission for their role in improperly assisting the Posners in the attempted deal.

<i>Money and Power</i> Book by William D. Cohan

Money and Power: How Goldman Sachs Came to Rule the World is the third book written by William D. Cohan. It chronicles the history of Goldman Sachs, from its founding to the subprime mortgage crisis of 2008. First published as hardcover on March 29, 2011, the book has been reprinted soon thereafter on April 12, 2011, by Doubleday again. The text has been reprinted as paperback on January 10, 2012, by Penguin Books.

The Raj Rajaratnam/Galleon Group, Anil Kumar, and Rajat Gupta inside trading cases are parallel and related civil and criminal actions by the U.S. Securities and Exchange Commission and the United States Department of Justice against three friends and business partners: Galleon Group hedge fund founder-owner Raj Rajaratnam and former McKinsey & Company senior executives Anil Kumar and Rajat Gupta. In these proceedings, the men were confronted with insider trading charges: Rajaratnam was convicted, Kumar pleaded guilty and testified as key witness in the criminal trials of Rajaratnam and Gupta, and Gupta was convicted in United States District Court for the Southern District of New York in Manhattan in June 2012.

<span class="mw-page-title-main">S.A.C. Capital Advisors</span> Group of hedge funds

SAC Capital Advisors was a group of hedge funds founded by Steven A. Cohen in 1992. The firm employed approximately 800 people in 2010 across its offices located in Stamford, Connecticut and New York City, and various offices. It reportedly lost many of its traders in the wake of various investigations by the Securities and Exchange Commission (SEC). In 2010, the SEC opened an insider trading investigation of SAC and in 2013 several former employees were indicted by the U.S. Department of Justice. In November 2013, the firm itself pleaded guilty to insider trading charges and paid $1.2 billion in penalties. The firm shrank after returning the vast majority of its outside investor capital. Point72 Asset Management was established as a separate family office in 2014. SAC ceased to exist as a separate entity in 2016. Point 72, essentially the continuation of SAC, manages 30 Billion as of 2023.

<span class="mw-page-title-main">Anthony Chiasson</span> American hedge fund manager

Anthony R. Chiasson is an American hedge fund manager and co-founder of Level Global Investors LP, a Greenwich, Connecticut-based hedge fund management firm. Level Global was launched in 2003 with about $500 million in assets under management, and grew to $4.2 billion in assets and 75 employees before closing in early 2011.

<span class="mw-page-title-main">Goldman Sachs controversies</span>

Goldman Sachs, an investment bank, has been the subject of controversies. The company has been criticized for lack of ethical standards, working with dictatorial regimes, close relationships with the U.S. federal government via a "revolving door" of former employees, and driving up prices of commodities through futures speculation. It has also been criticized by its employees for 100-hour work weeks, high levels of employee dissatisfaction among first-year analysts, abusive treatment by superiors, a lack of mental health resources, and extremely high levels of stress in the workplace leading to physical discomfort.

References

  1. Stephen, Labaton (6 September 1989). "Ex-Goldman Trader Enters a Guilty Plea". The New York Times.
  2. Stolley, Richard B. (May 25, 1987). "THE ORDEAL OF BOB FREEMAN". Fortune. Archived from the original on 22 February 2014. Retrieved 14 February 2014.
  3. COHAN, WILLIAM D. (March 4, 2010). "A Wall Street Witch Hunt". New York Times. Retrieved 14 February 2014.
  4. Thomas Jr., Landon (February 18, 2002). "Cold Call". New York Magazine. Retrieved 14 February 2014.
  5. 1 2 COHAN, WILLIAM D. (April 27, 2011). "Why Is Enough Never Enough?". New York Times. Retrieved 14 February 2014.
  6. Associated Press (June 8, 1993). "Freeman Agrees to $1.1-Million Fine, Suspension in Beatrice Deal". Los Angeles Times. Archived from the original on March 4, 2014. Retrieved 14 February 2014.
  7. Bernstein, Jonathan (7 March 2010). "NYT Blogger William Cohan Hearts Poor, Abused Goldman Sachs". March 7, 2010. Seeking Alpha. Retrieved 14 February 2014.