Another Convicted Insider Trader Challenges Ruling Based on Newman Decision

Publisher: Forbes
Author: Walter Pavlo

On Nov. 9, 2009, Michael Kimelman’s home was searched by FBI agents, he was taken away in handcuffs and then charged with being a part of an insider trading scheme.

Shortly after that was offered a deal by government prosecutors – plead guilty to a felony and avoid prison (probation). It is a deal most defendant’s dream of when they find themselves in the cross-hairs of a federal criminal case. Kimelman turned the deal down and went to trial to prove his innocence. In a two week trial in 2011, Kimelman, along with two co-defendants, brothers Zvi and Emanuel Goffer, were all found guilty. Kimelman was sentenced to 30 months in prison, which he has already served, and was released in August 2013, a month after losing an appeal to the 2nd Circuit to have his conviction overturned. He is currently in his last year of supervised release.

The crime they were convicted of alleged that Zvi acquired inside information through an intermediary who had contacts in mergers/acquisitions at the law firm Ropes & Gray. That information made it to Kimelman who traded on it. The indictment charged Kimelman with conspiracy to commit insider trading based on purchases of 3Com Corporation stock in August 2007.

A motion to vacate his conviction and sentence was filed Thursday, by attorney Alexandra Shapiro. For full access to the article, please click here.