Toronto lawyer jailed 39 months for insider trading

Stanko Grmovsek, who pleaded guilty to insider trading in Ontario last year, was sentenced Thursday to three years and three months in jail, according to the Financial Post.

The Toronto lawyer received the sentence in an Ontario court for his part in a scheme in which he earned $9 million US by trading stocks based upon illegally-obtained information.

Grmovsek pleaded guilty to the insider trading charges in Canada and the United States last October after a joint investigation by the Ontario Securities Commission, the RCMP's Integrated Enforcement Team and the U.S. Securities and Exchange Commission.

The OSC said Grmovsek and law school classmate Gil Cornblum exchanged confidential information on numerous corporate transactions between 1994 and 2008.

Cornblum, who committed suicide last October, would use his position as a lawyer to seek out confidential information on companies and give it to Grmovsek, "for sole the purpose of [trading in securities] … by Grmovsek for a profit," the OSC's statement of allegations in the matter reads.

The pair tried to disguise their activities by using numerous brokerage accounts in the Bahamas before routing their illicit profits back into Canada, the regulator said. Cornblum tipped Grmovsek to material in advance of news releases on 46 separate publicly traded companies, according to the OSC.

Cornblum was a mergers and acquisitions lawyer at a number of prestigious law firms in Toronto and New York until 2008. Grmovsek was a practising lawyer until 1997, "when he ceased practising law and engaged in the illegal insider trading scheme full-time," the OSC said.

As part of an earlier agreement with the OSC, Grmovsek was ordered to disgorge all profits obtained in the scheme, and will be permanently prohibited from buying or selling securities or acting as a director or officer at any registered firms.

A reader from internet says:

For those who think white collar robbery is sentenced lighter than "the average guy robbery" google these words "Nima Saadati CIBC Richmond Hill bank robber".

Didn't wanna cut and paste an article from another pubplication (not sure if it is allowed). Essentially, this guy was sentenced to 10 months in jail. He and an accomplice had robbed a lady at a bank when she tried to make a "large bank deposit" we was brandishing a weapon (a steel pipe)...they were caught about a month later when they tried to rob a CIBC branch in Vaughan which just happened to be under surveilance.

The point is his 10 month sentence was a reduced ("time served") and he was anticipated to spend 3 months and 16 days in jail.

Again, without commenting on the appropriateness of the sentence in the case that this thread is about, don't suggest that lawyers get softer sentences for robbery than other folks.

Other says:

I just don't see the difference between what this scum bag did and what a armed robber holding up a bank does. Why is the punishment so different ?
This white collar crime can affect thousands of people impverishing them to such an extent that would domino into other crimes.

White collar crime is not really a crime because the law makers are white collared people. You cannot have the same laws apply to the 1% rich and ruling class, as it does to the rest of society.

Have you no sense or understanding of history.

f the lawyer absconded with only a million in cash, then he would get.... ummmm 4 1/2 months? A Huron, Mohawk,Cree person who steals to feed his family would get a hell of a lot more than 40 months. Such a fair and equitable system. 9 million dollars and only 39 months. Wow. I guess it wasn't violent..... like... Madoff and all the suicides he initiated. It wasn't violent. Not a danger to society. Doesn't make sense. I guess the rule of thumb is, if you are going to steal, STEALLLLLLLL BIG!!!!. The law respects that an honours that. Penny ante stealing is going to get you hard time. Glorious gobs of money is gonna get you club fed. Go big.

Perhaps because whenever lawyers are criticized there is an imbalance of posts/comments from people who have that "all lawyers are bad" point of view.....so, if the comments end up being very one sided, so will the agree/disagree selections....I guess

Like the man says a lawyer went to a whorehouse three nights in a row demanding sex witht the same woman an paying $5,000 per go. When she asked why are you paying so much he says "your sister died and left you $15,000 that I had to deliver in person".

Goes to show you that after almost 50 years of Liberal rule you can count on death, taxes and being screwed by a lawyer.

I do a lot of trading and I'm all in favour of the law rounding up the crooks and insider traders. Some brokers are even known to brag about not getting caught because the law just doesn't regulate our markets. Perhaps if those entrusted to monitor the markets were not taken from among their broker golfing buddies.