"It was exciting," Kluger said. "There was a sense of urgency, of fast work, of making the front page of the newspaper."
During that summer, he talked on the phone to Robinson, Kluger said. Robinson was intrigued by the material, non-public information on public companies that Kluger saw daily.
"He said, 'So what you're telling me is you get to know what's going to happen before the rest of the world does,'" Kluger said. "I said, 'Yeah, I guess.' He said, 'You could make a lot of money with that information.' I remember saying, 'Yeah, but it's really risky. You could end up going to jail.'"
Robinson, who will report to prison after the Sept. 3 Labor Day holiday, declined to comment last week at his home.
After working with Kluger, Robinson took a job at Weiss, Peck & Greer, a New York venture capital firm where he met Bauer. Robinson and Bauer, a native of Melville, New York, became fast friends. Robinson told Kluger he should meet Bauer, who bought and sold so many shares that any tainted trades would not arouse suspicion by the SEC.
'Stupidest Decision'
"That was the moment when I should have said, 'Just kidding, let me go on with my life,'" Kluger said. "That was when I made the stupidest decision of my entire life."
Both Bauer and Kluger lived on East 87th Street in Manhattan. Robinson arranged for them to meet in June 1994 on the street outside of Bauer's apartment building. Kluger leaned against a pay-phone enclosure, smoking cigarettes and sizing up Bauer.
"He was trying to demonstrate to me that he was a big stock trader," Kluger said. "His attitude was arrogant and know-it-all. He was trying to make it seem that I needed him more than he needed me."
Still, the men agreed to try trading on inside information and split the money three ways, Kluger said.
First Tip
Kluger's first tip involved the proposed merger of QVC Inc. and CBS Corp., a Cravath client. The deal never happened. Kluger then passed information about the acquisition of Neutrogena by Johnson & Johnson, another Cravath client. Each man made about $8,000, Kluger said.
"I had no idea that we were launching a scheme that was going to go on and on and on," Kluger said. "All that I was doing at that point was a very small insider-trading deal."