A 1988 graduate of the Wharton School pleaded guilty Tuesday to federal charges that he and a boyhood friend traded on inside information after examining failed Wall Street deals of the 1980s. Darrin Gleeman, 26, of New York, pleaded guilty before U.S. District Judge Lawrence M. McKenna to conspiracy to commit securities fraud and to wire fraud. And Christopher Garvey, 26, of Sacramento, Calif., Gleeman's childhood friend and a graduate of Harvard University, pleaded guilty to one count of conspiracy to commit securities fraud. Gleeman faces up to 10 years in prison and more than $500,000 in fines. Garvey faces a maximum five years in prison and more than $250,000 in fines. U.S. Attorney Otto G. Obermaier announced the charges last week, saying that the men made more than $340,000 in at least 15 deals. He said Gleeman started his scheme by studying newspaper articles and library materials in 1989 about unsuccessful insider trading schemes. The prosecutor said Gleeman later convinced Garvey to get a job at the New York law firm of Skadden, Arps, Slate, Meagher and Flom so that he could learn information that would help the two men profit from stock transactions. Gleeman later allegedly recruited his father, Seymour, 59, to assist in the scam. The elder Gleeman still faces various criminal charges, including securities fraud. Gleeman sought the help of his father, then a senior marketing representative with International Business Machines Inc., because he needed someone ''who could inconspicuously travel abroad to open foreign trading accounts,'' court papers said. Wharton Vice Dean Janice Bellace said last night that she was "disturbed" by news of the guilty pleas. "We are always very distressed to discover that some of our graduates obviously did not get the school's message that although we want our students to be competitive, we also want them to be ethical," Bellace said. She noted that Wharton's revised undergraduate curriculum requires students to take two courses in "societal environment," one of which may be on ethics. Bellace said she found the news "especially disturbing" because many Wharton graduates who work on Wall Street are "acting lawfully and ethically." "I do worry about it giving Wharton a bad name because they're not typical of our graduates, they're aberrant," she said. "But that's what you see on the front pages of the newspapers." Finance Professor Morris Mendolson said last night that Gleeman's behavior is not a reflection of what Wharton students are taught. But he said some people will inevitably associate the school with the insider trading allegations in this case. Mendolson added, however, that the apparent involvement of Gleeman's father in the scam suggests that Gleeman was more influenced by what he learned at home than at Wharton. "You know the old business about family values," he said. "If his father's involved, that says someting about that family's values." Gleeman is not the only Wharton graduate to have been involved in financial corruption on Wall Street. Michael Milken, who received an MBA from Wharton in 1979, pleaded guilty in 1990 to breaking federal securities and tax laws. Milken was sentenced to 10 years in prison, but his sentence has since been reduced. Attorneys for Gleeman and Garvey said the plea was part of a deal in which their cooperation in the continuing investigation would be taken into account at sentencing. A date was not announced. The Associated Press contributed to this story.Comments powered by Disqus
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