Saturday, April 9, 2011
Matthew Kluger & Garrett Bauer
The Wall Street Journal reported on the arrest of Matthew Kluger and Garrett Bauer on insider trading charges. Mr. Kluger is a lawyer who worked at prestigious firms such as Cravath Swain, Skadden Arps, and Wilson Sonsini. His access to news in high-level merger and acquisition deals proved to tempting for him to handle. Through an intermediary, prosecutors allege, Mr. Kluger tipped off Garret Bauer, a Wall Street trader.
As I read the article, I was struck by the efforts the conspirators took to conceal their crime. They discussed destroying cellphones, burning $175,000 in cash, washing evidence with hopes of erasing fingerprints. These were well educated professionals acting as if they were engaged in typical street crimes. Had you asked these men, forgive my presumptuousness, when they graduated college if they could have ever envisioned cheating (well cheating at this level, I mean), I’m sure they would have said no; such behavior would have been foreign to their character. Yet circumstances coupled with their positions of power interposed a dangerous line they were all too willing to cross. Now, it’s party time–it’s time for them to face the unforgiving wrath of the bloated beast that is the criminal justice system.
I am somewhat experienced in dealing with the criminal justice system. I am not a lawyer, but a former investment professional who struggled through it as a defendant. My crimes exposed me to an indictment for securities fraud and an 18-month federal prison sentence. That experience exposed me to hundreds of other prisoners, many of whom made the same bad decisions that Mr. Kluger and Mr. Bauer are apparently making.
The truth is, burning evidence isn’t the answer. I once tried to avert my troubles with the criminal justice system by making the same type of ridiculous decisions. It turned out badly, costing me hundreds of thousands of dollars in legal fees and a sanction that ended up being more severe than it would have been had I made more responsible decisions.
The time to avoid trouble with the criminal justice system is before a crime is committed. Once an individual crosses that line, the sooner he can accept responsibility and begin setting his course back on the right trajectory with values-based decisions, the sooner he begins to start the healing process. I didn’t start the healing process until the spring of 2008, in prison. Not a day passes without my wishing that I had sought penance sooner; indeed my instincts told me too. I wasn’t ready. We all learn lessons at different stages, I guess.
In my books Lessons From Prison and Ethics in Motion I discuss what I learned as a defendant. I also discuss what I learned from the hundreds of other white collar offenders with whom I served time. Without exception, the individuals who were able to accept responsibility and begin efforts to reconcile with society were the ones who began working their way back toward happiness. Those who kept clinging to denial and living with excuses suffered with clouds of bitterness and anger eating away at their lives.
If you or someone you know faces trouble with the criminal justice system, please give me a call. If retaining a consultant is not in your budget, I recommended, at the bare minimum, reading the daily blogs and books written by Michael Santos, our nations most successful prisoner.