Zvi Goffer gets harsh term


Zvi Goffer is not much of a gambler.

He rolled the dice by taking his insider trading case to trial, where his best defense efforts went down in flames. He gambled again when he threw himself at the mercy of the court after the jury convicted him. In a striking letter to the judge, he waived his right to appeal and flatly admitted his guilt. This was seen as especially odd in that he had been defending himself arduously at trial. He was making a blatant bid for lenient sentence, but guess what? He was sentenced to 10 years of hard time, a sentence close to his prosecutors' recommendations. That ranks as one of the longest sentence ever imposed for insider trading-not what Goffer had in mind.

The New York Times quoted the judge: "This will be used to send a message to Wall Street. These crimes are not going to be tolerated."

Winifred Jiau, a bit player who should never have taken her case to trial, got 4 years, which was below the six to eight years prosecutor's recommended. All this sets the stage for the sentencing of Raj Rajaratnam, the convicted insider trading master mind around whom the likes of Goffer and Jiau revolved.

My sense is that Judge Richard Holwell will lower the boom with a sentence of perhaps 15 to 20 years. That would be below the prosecutor's recommendations. It's doubtful he'll buy the idea that insider trading is a victimless crime and therefore does not require harsh penalties. When he sentenced Danielle Chiesi, he was quoted as saying, "The message to Wall Street needs to be loud and clear: If you trade on inside information, you will be caught, convicted and sent to prison."

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