United States v. Kurland, No. 10 Cr. 69 (VM), 2010 WL 2267509 (S.D.N.Y. May 26, 2010)
Kurland pled guilty to insider trading in what is known as the Galleon hedge-fund insider trading case. At sentencing, he moved for a finding that he was a minor-participant in his offense, a downward departure based on his "extraordinary physical impairment," and a non-Guidelines sentence based on on his contributions to family and the community. The court rejected all. And, in doing so, it had some choice words for Kurland -- words that reflect the attitude that white-collar defendants might well face in any case brought in today's economic environment. Here are some selections:
In coming to its sentencing decision, the Court has considered Mr. Kurland's significant contributions to his family and to the larger community. The letters from friends, family, and associates paint a picture of the model citizen and family man; a man held in the highest regard by those around him. The Court particularly notes Mr. Kurland's involvment in his daughter's nonprofit organization, as well as his generous donations to St. Christopher's School for Kids and other charities. Today, Mr. Kurland's attorney reiterates the message conveyed by the letters: that Mr. Kurland is known for his commitment to philanthropy and the public good, kindness to friends, and devotion to family.
Unfortunately, however, Mr. Kurland's presentation to the Court, though stressing points that argue for uniqueness, distinction, and individual consideration, is in fact not uncommon in the world of white collar crime and has been made in this courtroom many times before. Mr. Kurland urges the Court to consider that he has already shown full rehabilitation and earned redemption; that there is absolutely no likelihood of recidivism and thus no threat of future harm to society; that no further need exists to punish him because he has been wracked long enough by shame, by ruin of his family and personal life, by loss of his primary means to earn a livelihood. Mr. Kurland argues that the purposes of sentencing have already been satisfied, that a sentence of incarceration would serve little or no useful purpose, and that probation would be enough.
Let me stress at this point that the Court is not unmindful or unsympathetic to these points. There is much in the Defendant's plea to commend the compassion it seeks to evoke. But the argument, compelling as it sounds on the surface, fails in essential ways. Fundamentally, it is flawed by what it omits. In particular it makes no account of several other circumstances courts are instructed to weigh adequately in ordering a fitting sentence: to reflect the severity of the crime; to promote general respect for the law; to avoid unwarranted sentencing disparities; and to consider the impact of the crime not only on its immediate victims, but on the larger social order. These principles are interrelated. They share vital links with some basic concepts, ideals emblematic of the law, profoundly significant for sentencing to ensure a right and just result for all concerned: fairness, balance, proportionality, and equality of treatment under law for relatively similar persons and circumstances. In sentencing, these principles seek to ensure that judgments overall fairly align so as to achieve, like bodies in orbit, a special form of equilibrium, a proper balance in the delicate symmetry of justice.
. . . .
In the context of securities fraud, the whole range of harm caused cannot be measured solely by the defendant's net losses or gains. By centering entirely on effects on him, Mr. Kurland's calculus of injury improperly discounts material harm his offense caused to larger societal interests. Mr. Kurland's actions, stemming from a recognized leader of the industry, compromised the financial market's integrity at a time of financial crises and widespread concern about corruption, rampant recklessness, and arrogant greed at the highest levels of the industry, a culture of oblivion to the meaning of reasonable limits that contributed significantly to bring about the worst economic collapse in the country since the Great Depression. As has emerged from various public investigations of the aftermath, those practices played a role in the disintegration or bankruptcy of some of the most venerable financial institutions and required government rescue efforts at a cost of hundreds of billions of public dollars.
It is this Court's view of matters now common knowledge, that to some extent this country's financial meltdown was fueled precisely by the attitudes manifest by Mr. Kurland in this proceeding, and repeated by defendants in other related cases. These offenders express a view that forms a pattern: They minimize their conduct, they suggest that their roles were really minor, that the gains they made were relatively small, that others are more to blame for more culpable offenses, that the markets were not really hurt, so that the offenses charged essentially amount to victimless crimes.
These rationalizations are beside the point. Fundamentally they suggest a perception that the law applies only to the other guy, and that what are self-servingly dismissed as minor infractions have no cumulative impact on the larger community, or indeed on the nation as a whole. This view, if not effectively curtailed, can quickly deteriorate to a philosophy in which moral bounds blur or disappear altogether, engendering a reality in which everything is permitted. The real point for Mr. Kurland here was that he had a choice. As a leader of the financial industry, he could have led by law abiding example. Instead, he chose to follow. He became a joiner, surrendering to the spree of the financial market's virtual mob mentality that nearly brought down this nation's economy in the quest for ever bigger and faster gains.