A former portfolio manager at billionaire Steven A. Cohen's hedge fund was sentenced on Friday to 2-1/2 years in prison, after pleading guilty to insider trading in chipmaker Marvell Technology Group Ltd. Donald Longueuil, a former SAC Capital Advisors LP money manager, is among the roughly 50 people who have been charged in a sprawling US hedge-fund insider trading probe unveiled in October 2009. Longueuil, 35, had pleaded guilty on April 28 to securities fraud and conspiracy, and forfeited $1.25 million.
Prosecutors said that from 2006 to 2010, Longueuil, former SAC analyst Noah Freeman and hedge fund manager Samir Barai agreed to share tips on such companies as Marvell, Actel Corp, Advanced Micro Devices Inc, Cypress Semiconductor Corp, Fairchild Semiconductor Corp and Nvidia Corp. They also said recorded phone taps showed Longueuil admitting to having roamed Manhattan at 2 am to find garbage trucks in which to discard flash and hard drives he destroyed.
The sentence imposed by US District Judge Jed Rakoff was shorter than the 46 to 57 months that prosecutors sought, which mirrored federal sentencing guidelines. It is also the same sentence that Danielle Chiesi, a former hedge fund trader who pleaded guilty to insider trading, received on July 20 from a different Manhattan federal judge, a punishment Rakoff discussed.
Longueuil's lawyer, Craig Carpenito, requested an 18-month term. Rakoff said prosecutors made a "convincing case" that prior insider trading sentences have not deterred others, but that the guidelines range is "artificial and does not reasonably capture the multitude of variables" in Longueuil's case.
The judge said he would have sentenced Longueuil to just two years in prison but for the obstruction of justice. "There is much good in this person," and the defendant, "in the fullness of time, will lead a productive and useful life," Rakoff said. "But there is a bedrock of hard facts that cannot be ignored."
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