Investment Firm Denies Knowing of Ex-Employee’s Insider Deals
NEW YORK (AP) _ Lawyers for a securities analyst who was given a suspended sentence in an insider trading scheme say his former superiors at a prominent investment firm encouraged his actions, but the firm denied the allegation.
Robert Salsbury, 27, of Manhattan, was sentenced Tuesday to three years’ probation, including 200 hours of community service annually for the three years.
He was part of a ring of four young Wall Street professionals and a client of one of them, known as the ″Yuppie Five,″ who used non-public information to trade in securities involved in six proposed or anticipated corporate takeovers.
He had pleaded guilty in June to one count each of mail fraud and attempting to obstruct a Securities and Exchange Commission investigation of insider trading. Salsbury had faced a maximum sentence of 10 years in prison and a $500,000 fine.
In asking for leniency, Salsbury’s attorney, Stacy Moritz, said he was only trying to win the praise of superiors at Drexel Burnham Lambert Inc. who, she said, told him that ″to be good at this, you get inside information and trade on it.″
A Drexel spokeswoman repeated the denial issued last June when Salsbury pleaded guilty, saying, ″We have no reason to believe that Mr. Salsbury’s conduct was known or condoned by any official of this firm.″
U.S. District Judge Gerald L. Goettel noted that the Probation Department’s presentencing report recommended no prison time for several reasons, including that Salsbury was ″new in the investment world″ and his superiors ″virtually urged him to obtain inside information.″
″If that is true,″ said Goettel, ″there obviously are some much higher- ups at Drexel Burnham that should be brought to justice.″
Assistant U.S. Attorney Steven Kaplan said only that an investigation was continuing.
Kaplan told Goettel that Salsbury had cooperated with investigators and was continuing to cooperate but he ″can certainly be characterized as playing a very important role in this insider trading scheme.″
The judge expressed concern that the suspended sentence might send a message to Wall Street that ″these sort of offenses can be committed with some impunity. I certainly don’t intend to send that message.″
The case has nothing to do with investigations of insider trading by Ivan F. Boesky and Dennis B. Levine, officials said.