Nuveen Insider Trader Deserves Nearly Six Years, US Says

Former Nuveen LLC trader Lawrence Billimek should spend almost six years behind bars for front-running his employer’s trades to make $47 million in illegal profits, federal prosecutors said, while the firm itself is demanding he repay it more than $38 million.

The government urged US District Judge Paul Gardephe to sentence Billimek to 70 months in prison on May 20 in New York, saying in a court filing Monday that such a term was necessary to deter others from committing similar crimes. 

Billimek, 53, pleaded guilty in November to passing tips about planned Nuveen stock purchases over a six-year period to retiree Alan Williams, who would then acquire the shares ahead of the asset management giant. Williams pleaded guilty two months before Billimek and is scheduled to be sentenced this fall.

Meanwhile, Nuveen’s parent company, TIAA-CREF, is asking Gardephe to order Billimek to pay it $38.4 million in restitution. Gardephe on Tuesday ordered Billimek to address the request by tomorrow night. The judge also asked him to respond to probation officials’ claim that he hasn’t disclosed the details of two Hawaii property sales or explained how he is covering monthly expenses of more than $38,000 on a monthly income of about $24,000.

The case was one of the first in which the US Securities and Exchange Commission’s Consolidated Audit Trail — a controversial database tracking almost all US market activity — was credited with catching insider traders. 

Lawyers for Billimek last week asked Gardephe for the “most lenient sentence,” arguing the ex-trader had suffered enough by losing his career and reputation. 

But prosecutors on Monday asked the judge for prison time, saying that he “abused his employer’s trust to carry out a multiyear insider-trading scheme that reaped tens of millions of dollars of profit that funded his lavish lifestyle, including the purchase of multiple homes.”

“Along the way, he deceived his employer, family, and multiple financial institutions,” prosecutors said. “And it most certainly did not have to be this way — the defendant had a steady career and every opportunity to lead a law-abiding life. But when he was faced with financial difficulties, the defendant chose to orchestrate for the next six years a complex, calculated, insider-trading scheme.”

Fraud Schemes

The government said a prison sentence is needed to stop others from similar conduct because “fraud schemes are difficult to detect and prosecute, especially where, as here, the defendant took steps to obscure and hide his conduct by keeping the conspiracy small and engaging in layers of fraud, including through the use of prepaid burner phones and through repeated lies to financial institutions.” 

Prosecutors also said that, while Billimek has no history of criminal activity, he needs to be incarcerated to stop him from returning to criminal conduct — noting that he has tens of thousands of dollars in monthly expenses and continues to day-trade from his home in New Orleans.

“So, while this may technically not be a job in the ‘financial services industry,’ it is most certainly a role that would allow the defendant to again succumb to the temptation of the easy way to profit — through inside information,” the government said. “Indeed, the defendant’s own scheme relied on just such a day trader to carry out the trades on the information the defendant provided; in some ways, he is uniquely qualified to recidivate and engage in this conduct again.”

The case is US v Billimek, 22-cr-675, US District Court, Southern District of New York .

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