Kimelman - Confessions of a Wall Street Insider: a Cautionary Tale of Rats, Feds, and Banksters

PRAISE FOR
CONFESSIONS OF A WALL STREET INSIDER

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Kimelman is guilty of one thing: writing a helluva book. If you want a front row seat to a Wall Street witch-huntread this.

Turney Duff, bestselling author of The Buy Side and Consultant on the Showtime Original Series Billions

Kimelman delivers a taut page-turner that gives readers an inside seat at the real life Billions that are a daily part of the cutthroat world of proprietary traders. He also exposes a criminal justice system in which prosecutors will do anything to win a case and questions of innocence are far less important than notching a victory. In this disturbing and cautionary tale from the inner sanctums of Wall Street to Federal prison, Kimelman ultimately tells a singular and riveting tale of survival and endurance.

Gerald Posner, author of Gods Bankers: A History of Money and Power at the Vatican

Kimelmans account as a defendant in the federal criminal justice system provides insights into just how broken and frightening that system has become.

Walt Pavlo, Jr., Forbes columnist and co-author of Stolen Without a Gun

If you like wild rides, youll love Confessions of a Wall Street Insider , Michael Kimelmans gripping, well-written memoir of his incredible journey from an associate at the tony law firm Sullivan & Cromwell to the lunacy of day trading, and into the great beyond of Wall Street hedge funds. When hes arrested for insider trading in 2009, the adventure really begins.

William D. Cohan, best-selling author of House of Cards: A Tale of Hubris and Wretched Excess on Wall Street

When prosecutors place a political agenda and career ambition over truth and justice, people inevitably get trampled. Michael Kimelman is a perfect example of that collateral damage.

Joe Tacopina, celebrity criminal defense lawyer and owner of the Venezia FC Soccer team

Copyright 2017 by Michael Kimelman

All rights reserved. No part of this book may be reproduced in any manner without the express written consent of the publisher, except in the case of brief excerpts in critical reviews or articles. All inquiries should be addressed to Skyhorse Publishing, 307 West 36th Street, 11th Floor, New York, NY 10018.

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Library of Congress Cataloging-in-Publication Data is available on file.

Cover design by Rain Saukas

Cover photo credit: iPhoto

Print ISBN: 978-1-5107-1337-6

Ebook ISBN: 978-1-5107-1338-3

Printed in the United States of America

DEDICATION

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For my Mom and Dad, Barbara, and Charles, whose love and courage never wavered. I cant thank you enough or ever repay you for what you gave me. If I am half the parent to my three children that you were to me, Ill know I did all right.

ACKNOWLEDGEMENTS

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P ETER B OGART WAS MY INVALUABLE PARTNER in editing and structuring this book. His brilliant acumen and generosity helped captain this project to the finish line. Everyone should be lucky enough to have a friend like Pete in their lives.

To Sharon Lord, Allison Oakes, Melissa Kotlen, Eileen Fischer, Claudia Borg, Turney Duff, Walt Pavlo, Ashley Parrish, Meredith Morton, Ilana Kuznick, Dave Fogel, Whitney Korchun, Jason Goldfarb, Jeff Wylde, Darren Lampert, Andrew Herrmann, John Goldman, Kareem Biggs Burke, and others who lent a sharp eye and a kind pen to the manuscript, and whose friendship blessed my life.

To my ride or dies, Stan Horowitz, Randy Oser, Moe Fodeman, Dino Capuano, Phil Berkeley, Pete Izmirly, Brian Hutchison, Chris Johnson, Igor Velikov, Keith Sutton, Mike Borzello, Adam Zutler, Brian Zeft, and anyone else I missed. You know who you arepeople whose friendship I measure in decades and would gladly take a bullet for.

To my Lburg crew. Ill take good people in horrible conditions over the opposite every time. Funny how humanity thrives even under the most inhumane circumstances.

To the Skyhorse team, Tony Lyons, Scott Kenemore, Mike Lewis, and Mark Gompertz, who believed in the story and brought it to fruition.

To my brother Andy, who has always been a champion. Big brothers arent supposed to look up to younger brothers, but I have from day one.

To Lisa, who I have a lot of love for and, with perfect knowledge, would still do it all over again.

And finally, to those who make my heart sing the loudest, my three children, Sylvie, Cameron, and Phineas. When faced with an impossible situation, I tried to make the least worst choice, and to keep my chin up and never forget to smile and be grateful. I hope you can understand one day, and do the same.

CONTENTS

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PREFACE

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W HEN YOU DECIDED TO PICK UP this book, chances are the one thing you knew about me was that Im a convicted felon.

In America, were careful to repeat the adage that someone charged with a crime is innocent until proven guilty. But lets be honest. Lets be frank. This is you and me talking here. Most of the time, when someone is indicted and brought to trial for a financial crime, we assume that he (or she, but usually he) is likely to have done something wrong. And if that defendant is found guilty by a jury of his peers? Then the assumption becomes an accepted fact. The jury heard all the facts and made an educated pronouncement. The system worked.

Or did it?

It was alleged that on August 8 of 2007, I bought shares of stock in a company called 3Com six weeks before a large takeover deal for that company was announced. It was further alleged that I bought this stock because I had illegal information about the trade. When I was arrested, it was along with several other traders from more than one firm. Some of these menwhen convictedwould see prison terms that set new records for sentences given in insider trading cases. These men were charged with making multiple illegal trades and perpetrating a vast conspiracy of illegal insider information.

I was, again, charged with making one illegal trade. (And, later on, with conspiring.) The case against me was so illusory that the government offered me an unprecedented non-cooperation probation/no jail plea deal the day after my indictment, which I later turned down.

It is not my project, here, to convince you of my innocence. What I do hope to convey is exactly what it feels like when a routine work decision made years beforewhich you dont even remember very wellbecomes the sole focus of your existence, and the linchpin of your fate and your familys future. What it feels like when the crushing pressure of a federal indictment comes down with all its force on what had been an enduring marriage. What it feels like when you begin to realize that those whom you have trusted are ready to betray you completely.

You probably know that the law prohibits insider trading. What you may not realize is that there is no clear definition of what insider trading actually is. None. Go check. Google away, Ill wait. No statute spells it out. No law book provides a comprehensive accounting of its parameters. (When it came to my case, even the judge got confused.)