After the raid on the middleman's home, Bauer and Kluger feared they were under suspicion and began to destroy evidence, including computers and phones, authorities said.
'Burn It'
Bauer said he broke one telephone in half and threw the pieces into two separate trash cans at a McDonald's restaurant in Manhattan. Bauer became worried his fingerprints would show up on $175,000 in cash the friend had hidden and told him to burn it.
"Burn it?" the middleman asked.
"I would burn it in a fire," Bauer is quoted as saying. Earlier he had told the middleman he had $20 million in the bank and would give him whatever was needed for attorneys' fees and support for his family if he wound up in jail.
The complaint charges 11 illegal trades over Kluger's five years at Wilson Sonsini, when the men invested more than $109 million in the scheme, according to the authorities.
"Wilson Sonsini needs to explain why they could never have seen this coming," said Bruce MacEwen, a law-firm consultant at New York-based Adam Smith Esq. LLC.
"The reputational damage that Wilson Sonsini does have to worry about is for companies planning a major acquisition or IPO if they want to use the firm, how can they be sure that next week word won't leak out," MacEwen said.
Quantum, 3Com
The FBI said Kluger funneled tips before the announcements in May 2006 that Quantum Corp. would buy Advanced Digital Information Corp.; in May 2006 that Silver Lake Partners and Value Act Partners would buy Acxiom Corp.; in June 2007 that Elevation Partners would invest $325 million in Palm Inc.; and in September 2007 that affiliates of Bain Capital Partners LLC would acquire 3Com.