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Go to Jail

Rachel Ginsberg

Twelve years ago this month, Yaakov Friedland was an active market trader, but all that changed when he was caught in the web of an insider trading cleanup and wound up spending three years in federal prison. Every year at the end of the Month of Freedom, Yaakov celebrates his own “Exodus” from prison to liberty. Not a day goes by that he doesn’t relive the black hole of three years he spent behind bars, and that’s why he willingly shares his story.

Wednesday, April 10, 2013

jailWhile about 30,000 Jews — most of them unaffiliated — are incarcerated in jails all over theUS, today dozens of Orthodox Jews also find themselves imprisoned, and it’s not only about nursing home scandals, money laundering through tax-exempt organizations, or redirecting government social welfare funds to yeshivos. Yaakov’s story is frightening because to this day he claims he was clean, yet he was caught in a web much bigger than his legal resources — and there was no way out.

 

No Escaping the Feds

In 2001, Friedland, who was an active market trader and profited handsomely from the stock and commodities markets, was scooped up in the net of a federal investigation out to nail an insider-trading scheme. “No one escapes when the feds are out for a conviction,” he says, as he recounts the harrowing events that led up to his trial and after, when the jail door slammed on him for 36 months.

“Insider trading” is when investors privileged with confidential information use that knowledge to reap profits or avoid losses, to the detriment of typical investors who buy or sell their stock without the advantage of “inside” information. And Friedland was one of 16 people identified by the main defendant in the case — a computer programmer who worked in investment banking houses where he had access to confidential information concerning takeovers and mergers, which he then passed on for a fee.

Prosecutors accused Friedland of purchasing securities in several companies in advance of public notice that the companies were involved in merger and acquisition transactions — after allegedly being tipped off by the defendant. Yet Yaakov Friedland still maintains his innocence. “I was a very active private investor, and I got all kinds of information from a lot of people,” he told Mishpacha, and although passing on proprietary knowledge is illegal, the defendant did admit in court that he never actually told Friedland that he worked with corporate mergers.

“That didn’t matter in court,” says Yaakov, “because under the new revised conspiracy laws, it doesn’t matter what you actually knew. If you could have known or should have known, you’re in trouble. When the jury first came back with the question to the judge that I might not have known who the defendant worked for, I was thrilled. I thought, Now I’m off the hook. When I heard the judge’s answer about ‘should have known,’ I was dumbfounded.”

Despite Friedland’s personal outlay of tens of thousands of dollars in legal fees, the jury came back with a guilty verdict. Friedland was under house arrest during the months leading up to the trial, but when the verdict came down, he was a convicted felon. “The judge was going to let me out on bail, but theUSattorney stood up and said I was a flight risk because of my connections to people inIsrael, and so right in front of my horrified family the judge remanded me and I was handcuffed and hauled out of the courtroom.”

 

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