The New York Times reports that today Judge Deborah A. Batts sentenced former broker David Tavdy to 63 months in minimum-security federal prison.
A year ago Tavdy pleaded guilty to conspiracy and securities fraud charges filed by the Securities and Exchanges Committee following the exposure of a massive insider trading ring on Wall Street. Tavdy was one of 13 involved in what authorities at the time considered “one of the most pervasive insider trading rings since the 1980s.”
Between 2002 and 2006, Tavdy made 10.3 million dollars off of security transactions made after receiving tips from Mitchel S. Guttenberg, a former UBS executive. Guttenberg was sentenced to 6.5 years last November for his part in the scheme.
Despite Tavdy’s statement that “I made a mistake and I regret it,” Judge Batts reflected that this was not an isolated case and Tavdy and his cohorts made millions off of insider information. The year time between the pleading and the sentencing tends to dull the severity of Tavdy’s actions. Some might even ascribe to the mentality that Tavdy made a few mistakes and got caught up in a bad situation.
However, if you look back at some of the details reported a year ago in The New York Sun, the only mistake Tavdy and his cohorts seem to have made was getting caught. Cash deals, disposable phones, secret codes, blackmail, and bribery – sounds more like an organized crime ring than a simple broker getting caught up in the paper chase. Furthermore, Tavdy wasn’t just some average joe who stumbled upon some nonpublic information. He knew exactly what he was doing. He was a broker. He payed for nonpublic information. He used the information to make massive illegitimate profits. He should be punished accordingly.