Today the winners of Lawyer of the Day honors are obvious. Congratulations to Arthur Cutillo, Michael Kimelman, and Jason Goldbfarb, three attorneys who stand accused of involvement in the infamous Galleon Group insider trading scheme.
Both Cutillo and Kimelman have distinguished pedigrees, with ties to two top firms. Cutillo (left), a holder of an M.S. in chemical engineering as well as a J.D. (both from Villanova), was an associate at the white-shoe firm of Ropes & Gray. Kimelman (right), a partner at Incremental Capital LLC, once worked as an associate at super-prestigious Sullivan & Cromwell.
Check out Cutillo’s firm bio and Kimelman’s LinkedIn profile over here.
The third charged lawyer, Jason Goldfarb, apparently worked as a personal injury lawyer in Brooklyn. He allegedly served as a conduit of information between Cutillo and Zvi Goffer — the former Galleon employee apparently referred to as “Octopussy” at the SEC, because “he had his arms in so many insider” trading schemes.
More on our three honorees, after the jump.
So what do these two gents stand accused — and remember, they’ve just been accused, not convicted — of doing? From Am Law Daily:
According to a complaint filed against seven of those charged, Cutillo is alleged to have provided inside information on three transactions on which Ropes advised private equity clients: TPG and Silver Lake’s $8.2 billion acquisition of Avaya in June 2007, TPG’s $1.3 billion acquisition of Axcan Pharma in November 2007, and Bain Capital’s $2.2 billion acquisition of 3Com in September of that year. (Ropes is known for its strong private equity practice and has advised Bain and TPG on several high-profile deals, including a $17.9 billion buyout of radio giant Clear Channel and $28.1 billion sale of Alltel to Verizon last year.)
on the recruiting committee an in-office interviewer at Ropes & Gray — put your best foot forward for the applicants! You can read more about him over at Guanabee (which located Cutillo’s complete bio on the R&G recruiting page). [FN1]
Michael Kimelman is a founder and partner at Incremental Capital, LLC, a newly formed proprietary trading and hedge fund management firm in New York City. Mr. Kimelman has been involved in trading and money management since 1997. He was previously the number one trader at several firms, including recently as a partner at Remsenberg Capital. Prior to becoming a full-time trader, Mr. Kimelman worked as a mergers and acquisitions lawyer for Sullivan & Cromwell. He is a Chartered Financial Analyst and graduate of the University of Southern California Law School.
The third attorney, Jason Goldfarb, was an associate at the personal injury firm of Brecher Fishman Pasternack Walsh Tilker & Ziegler, in Brooklyn. As one might expect from a PI lawyer in Brooklyn, Goldfarb had a certain swagger to him; he allegedly derided some of his co-conspirators as “nervous nellies,” essentially telling them to man up.
According to the New York Law Journal, here’s the role Goldfarb played in the scheme (along with Arthur Cutillo):
Messrs. Cutillo and Goldfarb were charged as part of the insider trading network allegedly headed by Zvi Goffer, 32, a broker-dealer formerly with The Schottenfeld Group and now with Incremental Capital in New York City.
Mr. Cutillo allegedly gave information to Mr. Goldfarb on several mergers and acquisitions involving public companies that Ropes & Gray was advising, including Axcan Pharma, Inc., Avaya, Inc. and 3Com Corp.
Mr. Goldfarb, in turn, gave that information to Mr. Goffer. Both Messrs. Goldfarb and Cutillo are accused of receiving cash payments for the tips.
We don’t know how well personal injury firms in Brooklyn pay. But shouldn’t a Biglaw paycheck be enough to live on, even if you have wife and son and live in a nice suburb like Ridgewood, New Jersey? (For some speculation on Cutillo and his finances, see the comments on our last post.)
Read extensive coverage of the Galleon Group insider trading case over at our sister site, Dealbreaker.
[FN1] Cutillo is not the first Ropes & Gray IP lawyer to have a brush with the law this year. From the Daily News of Newburyport:
A Newburyport patent lawyer has resigned his right to practice law over accusations he billed his firm and clients more than $700,000 from a company he created himself, according to the state Board of Bar Overseers of the Supreme Judicial Court.
The Board of Bar Overseers, which has the authority to regulate and discipline lawyers, accepted the resignation of Matthew P. Vincent, a former Georgetown selectman chairman who did not run for re-election this year….
According to the official judgment issued by the board called a Judgment Accepting Affadavit of Resignation as a Disciplinary Sanction, Vincent in 2002 started a company called The IP Resource Company that performs patent database searches. However, Vincent never informed his law partners or clients that he was the owner and operator of the company, and billed the law firm for services over a period of six years. Vincent’s invoices totalled $733,771.30.
Arthur Cutillo was just an associate (and not a particularly senior one). But Matthew Vincent was a partner, recognized by Chambers and Partners as being a top practitioner in his field.
All About Arthur Cutillo, Alleged Insider Trader [Guanabee]
Ropes & Gray Lawyer In Custody In Galleon Case [WSJ Law Blog]
Ropes & Gray Lawyer Arrested in Insider-Trading Probe [Am Law Daily]
Alleged Insider Trader Michael Kimelman Is A Former Sullivan & Cromwell Associate [Clusterstock]
What The Complaint Says About Ropes & Gray’s Arthur Cutillo [Law Review]
Local lawyer, former selectman, disbarred [Daily News of Newburyport]