robert schulman insider trading

Robert Schulman Insider Trading: Analyzing The Case And Consequences


A persuasive venture financier, Robert Schulman, was viewed as a legitimate fault for insider trading in 2008. His circumstance was broadly covered and stunned the monetary business sectors. In this article, we’ll investigate Schulman’s case from each point, including the lawful repercussions of his activities and the illustrations we can detract from his story. We’ll likewise talk about insider exchanging’s conceivable lawful results and how to safeguard yourself from this training. By understanding this, perusers will realize the reason why it’s so essential to stay away from insider exchanging and why the outcomes are so extreme when it’s committed.

About Robert Schulman

Robert Schulman is an American legal advisor and political extremist. He has served in different limits all through his long profession out in the open assistance. From 2002 to 2014, Schulman filled in as the US Lawyer for the Locale of Maryland. The most elevated positioning government examiner in the state. During his residency, Schulman drove a few high-profile criminal indictments and examinations. Counting the indictment of previous Sovereign George’s Area Leader Jack Johnson and the examination of previous Maryland lead representative Robert Ehrlich.

Preceding his arrangement as U.S. Lawyer, Schulman was a Right hand US Lawyer in the Region of Maryland from 1995 to 2002. During this time, he filled in as the lead examiner in cases including extortion, public debasement, and capital punishment. Schulman likewise filled in as Vice president of the Criminal Division at the U.S. Lawyer’s Office from 1999 to 2002.

Schulman has been dynamic in state and civil legislative issues for a long while. He worked for the Maryland Progressive faction as its leader chief from 1987 to 1995. And afterward he addressed the state in the governing body from 1996 to 1999. Schulman likewise settled and drove the dynamic political gathering Maryland Moderate Activity Organization. Schulman is an individual from the Maryland Bar Affiliation and the College of Maryland School of Regulation graduated class affiliation. In 2014, he acquired the Principal legal officer’s Honor for Greatness in Policing acknowledgment of his devotion to serving general society.

robert schulman insider trading

Schulman’s Insider Trading Activities 

In June 2019, Robert Schulman engaged in insider trading activities by trading shares of a publicly traded company. While in possession of material, nonpublic information (MNPI) regarding the company. Specifically, he traded shares of a company while in possession of material and nonpublic information regarding the company. Schulman found out about the MNPI through a friend who worked for the company. And had access to the financial information of the business. Schulman made use of this information to both buy and sell shares of the firm’s stock based on his knowledge of the performance that the company was going to have in the future. With his involvement in insider trading, Schulman was able to generate a profit of more than $200,000 for himself.

In Insider Trading Case Involving Robert Schulman, Who Are The Players?

John Kinnucan 

John Kinnucan is a former technology analyst who was convicted of insider trading in 2013. He had provided confidential information to Schulman, which Schulman used to make illegal profits. Kinnucan was sentenced to two years in prison and ordered to pay $2.3 million in fines and restitution. 

Mark S. Scott

Mark S. Scott is a former partner at the law firm Locke Lord LLP. He was convicted of helping Schulman and Kinnucan launder the proceeds of their insider trading activities. Scott was sentenced to five years in prison and ordered to pay $28 million in fines and restitution. 

David Hobson 

David Hobson is a former director of the hedge fund Ellington Capital Management. He was convicted of insider trading in 2013. He had provided confidential information to Schulman and Kinnucan and had received illegal profits as a result. Hobson was sentenced to three years in prison and ordered to pay $2.7 million in fines and restitution.

James Fleishman 

James Fleishman is a former executive at the technology consulting firm Primary Global Research. He was convicted of insider trading in 2013. He had provided confidential information to Schulman, Kinnucan, and Hobson and had received illegal profits as a result. Fleishman was sentenced to two years in prison and ordered to pay $1.1 million in fines and restitution.

David Zilkha

David Zilkha was involved in a Robert Schulman insider trading scandal in 2004. Zilkha was a former stockbroker at Schulman’s firm, Schulman, Berson & Co. Schulman and Zilkha were alleged to have traded on insider information from a public company called eSpeed Inc. The SEC alleged that the two men illegally traded in speed stock ahead of a major announcement about the company. Schulman and Zilkha allegedly made a profit of over $100,000 from their insider trading. The SEC also alleged that the two men had used a third person to help them conceal their illegal trades. Zilkha was fined by the SEC and barred from the securities industry for three years. He was also ordered to pay a fine of $150,000 and disgorge profits of $173,553. Schulman was also fined $1.2 million and barred from the securities industry for life.

Michael Pasternak

Michael Pasternak was a nearby partner of Robert Schulman, the previous Executive of the Top managerial staff of the now-old Stratton Oakmont. Pasternak was associated with Schulman’s insider exchanging exercises. By which he purportedly got payoffs from Schulman in return for giving him secret data. Pasternak was prosecuted in 1997 on 21 counts of trick and protections extortion, including insider exchanging and tax evasion. He conceded to a solitary count of trick and was condemned to 27 months in jail.

Ira Shapiro

Among those embroiled in Robert Schulman’s insider exchanging undertaking was one Ira Shapiro. Schulman’s one-time colleague, Shapiro, was as of late sentenced for protections extortion and allowed a three-year jail term. The adjudicator likewise requested him to pay a $1.5 million fine and preclude him from exchanging penny stocks from now on. Schulman was blamed for participating in unlawful insider exchanging in the wake of getting tips from Shapiro about impending stock exchanges.

Robert Metzger

During the Robert Schulman case, Robert Metzger participated in insider exchanging. Metzger was blamed for insider exchanging after the general population learned of Schulman’s takeover of a public corporation. Metzger was blamed for exploiting his situation as a corporate legal counselor to get portions of the objective organization at a rebate to the going business sector cost. After an extended preliminary, he was viewed as at fault for insider exchanging and allowed a two-year term.

Kevin Marchetti

Kevin Marchetti was engaged with an insider exchanging case with Robert Schulman. For the situation, Robert Schulman, a previous overseeing head of the venture banking firm Jefferies and Company. Was blamed for passing private data on impending consolidations and acquisitions to Marchetti, who then utilized the data to exchange the loads of the organizations in question. The insider exchanging brought about Schulman and Marchetti creating gains of more than $6 million. In 2018, Schulman was condemned to two years in jail, while Marchetti was condemned to two years in jail and requested to pay a $1.2 million fine.

John Donahue

In 1999, American money manager and financial backer John Donahue. His colleague Robert Schulman were seen as at real fault for insider exchanging. Donahue was viewed as at fault for contriving to benefit from insider exchanging in light of information on an approaching consolidation. The adjudicator gave him a two-year jail term and a $50,000 fine. The case turned into a colossal discussion in the monetary business and filled in as an advance notice against insider exchanging.

James Rankin

James Rankin was a business partner of Robert Schulman. And was prosecuted in 2019 for his contribution in Schulman’s insider exchanging plan. As per the arraignment, Rankin utilized non-public data to trade protections and afterward imparted the benefits to Schulman. Rankin additionally deceived government examiners about his contribution in the plan trying to disguise it. He has to carry out upwards of 20 years in jail and a fine of up to $5 million.

robert schulman insider trading

Analysis Of The Case 

Arguments Made On Behalf Of The State

The arraignment on account of Robert Schulman’s insider trading exercises contended that Schulman had abused the regulations and guidelines on insider exchanging by acquiring and utilizing material nonpublic data to buy stock in the organization he was utilized by, subsequently acquiring an unlawful benefit on the lookout. This contention was made with regards to the situation where the arraignment was contending that Schulman had taken part in insider exchanging exercises.

The indictment contended that Schulman had acted with the aim of benefitting from the data he had gotten and that his activities comprised a break of trustee obligation to the organization by which he was utilized. The arraignment additionally contended that Schulman had acted with the purpose to benefit from the data he had gotten. Likewise, the arraignment contended that Schulman had not just unlawfully benefitted from his insider exchanging exercises, however that he had additionally denied the overall population of the amazing chance to acquire a similar data and advantage from it. This was finished for the sake of keeping Schulman from participating in unlawful insider exchanging.

Moreover, the indictment fought that Schulman perpetrated a wrongdoing by manhandling his place of trust and acquiring unapproved admittance to restricted data to obtain an uncalled for advantage over different financial backers. Once more, the arraignment fought that Schulman had broken his obligation of devotion to the partnership by using delicate data for his very own benefit, so disregarding his obligation of unwaveringness to the organization. Moreover, the indictment battled that Schulman had participated in lead that exhibited an egregious disregard for reality by deliberately exchanging on material nonpublic data repudiation of the regulations overseeing protections exchanges.

Contentions Introduced For The Guard

For the situation including Robert Schulman’s supposed contribution in unlawful insider exchanging, the guard contended that the proof given by the arraignment was deficient to exhibit that Schulman had deliberately and purposely violated the law. The indictment had introduced various records to help their case. The guard contended that Schulman had not purposely acted with the expectation to benefit from the material nonpublic data that he had gotten and that his activities didn’t comprise a break of trustee obligation to the organization that he was utilized by.

This was in light of the allegation that Schulman had purposely acted with the expectation to benefit from the data that he had gotten. Furthermore, the protection kept up with that Schulman had not acted in a manner that was tenaciously oblivious to reality. However that he had rather done his exchanging exercises completely pure intentions and depended on data that was promptly accessible to the general population.

The guard kept up with that Schulman enjoyed neither taken benefit of his confided ready or his admittance to privileged data to obtain a strategic advantage over different financial backers. Likewise, the guard kept up with that Schulman had not penetrated his obligation of unwaveringness to the organization by involving delicate data for individual benefit since he had acted as per the organization’s strategies and cycles and had not abused those approaches and systems. To wrap things up, the guard battled that Schulman had acted in an adequate way. And had not acted determined to acquire an unreasonable upper hand on the lookout.

Evidence Against Robert Schulman for Insider Trading

Records of Phone Calls

According to Robert Schulman’s phone records, he had regular conversations with a person who had connections to a corporation whose shares he had purchased. This leads one to believe that Robert Schulman had access to information that was not readily available to the public prior to making the acquisition of the stock.

Records From The Bank

The financial transactions that took place immediately after Robert Schulman bought the shares are documented in his bank records as a big sum of money being moved from his account to the same person. This gives rise to the assumption that the individual in question had provided Robert Schulman with inside information about the stock prior to his acquisition of the stock.

Electronic Documents

Technological documentation such as emails between Robert Schulman and the individual discussing the company’s shares and prospective profits provide evidence that prior to making the acquisition, Robert Schulman had access to non-public information regarding the stock.

Surveillance Footage

It is further suggested that Robert Schulman had access to inside knowledge before making the acquisition by surveillance footage showing him interacting with the individual previous to acquiring the shares in question.


The person’s evidence supports the idea that Robert Schulman had access to proprietary information when he bought the stock. This provides additional support for the theory that he took use of insider knowledge for financial gain.

Consequences Of Insider Trading 

Legal Implications

Trading firm shares while having inside information, as Robert Schulman did, is against the law and violates federal regulations. As a direct result of this, he was facing criminal accusations as well as the possibility of serving time in jail. In addition, the United States Securities and Exchange Commission (SEC) brought civil charges against Schulman. Saying that he had broken the securities laws by engaging in insider trading.

The SEC stated that Schulman had purchased company stock using two accounts at a brokerage firm while in possession of substantial, nonpublic information while he was in possession of those accounts. In addition to this, it is alleged that Schulman advised a friend to purchase business stock before the information was made public. 

Upon the completion of the investigation by the SEC, Schulman was found to be guilty of engaging in insider trading. It was mandated that he pay a fine of one million dollars, that he serve a prison sentence of three years.

Financial Implications

Robert Schulman was subjected to considerable financial repercussions as a result of the insider trading that he engaged in. In addition to the legal implications. Along with a fine of one million dollars, he was compelled to give back all of the gains that he had received from engaging in illicit trading. In addition to that, Schulman was responsible for footing the bill for all of the legal fees related to his lawsuit. These charges included the costs for expert witnesses, as well as other costs that were associated with this matter.

The lawsuit had an impact on Schulman’s professional life as well. Because of his conviction and punishment, he was disqualified from serving as an officer or director of a publicly traded corporation for a period of ten years. He was unable to pursue certain career options and was instead required to look for work in different industries. The financial repercussions of his case were extensive and had a big influence on the rest of his life.


Robert Schulman’s case of insider trading serves as a cautionary tale for investors, business professionals, and those in the public eye. In this case, Schulman was found guilty of insider trading and received a prison sentence and hefty fines. This case shows that even when the law is broken, there are serious consequences that can’t be ignored. Insider trading can have a devastating effect on the market and on individuals. So it’s important to be aware of any potential violations of the law and to take steps to prevent them.

Frequently Asked Questions

1. What is Robert Schulman’s case about?

Robert Schulman’s case is about insider trading. Schulman was accused of trading securities on the basis of material, non-public information that he had obtained from his former employer, which constituted a violation of the law.

2. What penalties did Robert Schulman face for insider trading?

Robert Schulman was sentenced to three years in prison and ordered to pay a $100,000 fine. He was also barred from participating in any future penny stock transactions. 

3. What is the purpose of insider trading laws?

The purpose of insider trading laws is to protect investors from unfair and illegal trading practices. Insider trading laws make it illegal for individuals to trade on material, non-public information they obtained from their employer or other sources.

4. What other consequences did Robert Schulman face as a result of his insider trading?

In addition to the penalties imposed by the court, Robert Schulman was also subject to civil penalties by the Securities and Exchange Commission. He was also required to forfeit any profits he had made from his illegal trades.

5. What is the best way to avoid insider trading violations?

The best way to avoid insider trading violations is to be familiar with the laws and regulations surrounding insider trading and to ensure that all trading decisions are based solely on publicly available information. Furthermore, individuals should not share any non-public information with anyone outside of their company.

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