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by Mike Caswell

A New York judge has handed a three-year prison term to Emanuel Goffer, one of the defendants in the hedge fund insider trading case. Mr. Goffer received the sentence in an appearance in Manhattan federal court on Friday, Oct. 7, before Judge Richard Sullivan. In addition to the prison term Mr. Goffer, 33, must forfeit $761,623 in illegal gains and must serve three years of supervised release. (All figures are in U.S. dollars.)

Mr. Goffer's sentence is the latest to arise from the U.S. government's two-year prosecution of the hedge fund insider trading ring. Prosecutors claimed that the participants made millions of dollars using inside information about upcoming takeovers, including the 2007 acquisition of Quebec-based Axcan Pharma Inc. The lengthiest sentence so far has gone to Mr. Goffer's older brother Zvi, who received a 10-year term. The brothers were convicted on multiple counts of securities fraud after a four-week jury trial in June, 2011.

Mr. Goffer's sentence is below the 3-1/2 to five years that prosecutors had sought. They said a substantial jail term was necessary not only to punish Mr. Goffer, but to deter others from committing what is a difficult-to-detect crime. In this case, the men communicated through untraceable prepaid cellphones and created "cover" computer messages in an effort to explain their trades. Prosecutors said Mr. Goffer's total gains from the scheme were as high as $2.4-million, although they essentially acknowledged that the evidence regarding $1.6-million worth of the gains may not be as strong, and suggested a $761,623 fine could also be appropriate.

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