Matthew Kluger yesterday received the longest sentence yet for insider trading: twelve years . That's a year longer than Raj Rajaratnam's, which was already longer than typical sentences for manslaughter, arson, and sexual abuse .
U.S. District Judge Katharine Hayden said Kruger deserved an especially harsh sentence for violating the trust placed in him as a lawyer : He got the information he relayed to stock trader Garrett Bauer from his work as an associate for major law firms such as Cravath and Skadden. Unusually, he was an associate for 17 years .
Revealing clients' confidential information -- for stock trading or any other purpose -- is a serious breach of legal ethics. Having admitted it, Kruger should now be unemployable as a lawyer. And since it's presumably also a violation of his contracts with his employers, they should be able to sue him for damages.
But insider trading is not a form of fraud , and it should not be any of the criminal law's business. Kruger deserves to need to find a new profession, but he ought to be free to do so.