He told prosecutors how the scheme worked, identified Kluger as the source and gave them a gym bag with $175,000 in Bauer's cash he was supposed to split with Kluger, who never got the money. Most important, Robinson agreed to secretly record his friends making incriminating statements.
When Kluger called Robinson on March 13, Robinson dropped a bomb: The FBI and Internal Revenue Service had searched his house in Long Beach, New York, six days earlier.
Robinson said agents knew he traded on information from Wilson Sonsini and could link him to Bauer. He said his wife wanted him to cooperate with authorities. Robinson didn't say he had already chosen to betray Kluger and Bauer.
Mr. G
Kluger and Bauer, known to his partners as Mr. G, fell into the trap. In calls over the next three weeks, Kluger said he destroyed a computer and iPhone used in the scheme. Kluger counseled silence.
"As long as Mr. G keeps his mouth shut and I keep mine and you keep yours, I don't think they're gonna find enough of anything," he said.
By April 6, agents found enough evidence. They showed up at Kluger's Colonial home at 6:50 a.m. to arrest him. At the same time, other agents handcuffed Bauer in his $6.7 million condominium in New York's Upper East Side.
Prosecutors charged Kluger and Bauer with securities fraud, conspiracy to commit securities fraud, conspiracy to commit money laundering and obstruction of justice. Robinson pleaded guilty a few days later.
Both Bauer and Kluger pleaded guilty last December. Kluger has also settled an SEC lawsuit, agreeing to pay $516,510 for his illicit profit while he worked at Wilson Sonsini.
Lecture Circuit