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Federal prosecutors in Washington, D.C., are urging an eight-month prison sentence for Romero Cabral da Costa Neto, a 33-year-old former lawyer at Gibson, Dunn & Crutcher. Costa pleaded guilty in November to insider trading related to drugmaker Swedish Orphan Biovitrum’s (SOBIV.ST) $1.7 billion acquisition of CTI BioPharma in May.
Insider Trading Revelations
Costa, a Brazilian national, worked as a visiting attorney in Gibson Dunn’s Washington, D.C., office under a one-year contract when the illicit trading occurred. Despite not being directly involved in the deal, prosecutors allege that Costa improperly accessed Gibson Dunn’s files related to the acquisition. On May 9, the day before the public announcement, he purchased over 10,000 shares of CTI, subsequently selling them the next day and making a profit exceeding $42,000.
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Prosecutors Sentencing Request
Prosecutors argue that the financial gain is the least egregious aspect of Costa’s conduct. In their sentencing memorandum filed on Saturday, they highlighted his privileged position at “one of the most prestigious law firms in the world” and emphasized his salary of over $200,000. Prosecutors asserted that Costa, entrusted with access to firm files, abused that trust by searching for exploitable documents.
Sentencing Date Approaches
U.S. District Judge Carl Nichols is set to sentence Costa on Wednesday. The defense, represented by Boies Schiller Flexner, has not yet commented on the prosecutors’ sentencing request. The U.S. attorney’s office in Washington declined to provide further details.
Costa’s Defense
In the sentencing memo filed by Costa on Friday, he portrayed his conviction as “a major aberration in what has otherwise been an exemplary life.” Costa cited his family’s challenges during their move to the United States and expressed dissatisfaction with his work at Gibson Dunn. Arguing that rehabilitation would be better served in Brazil, he requested a sentence of time served and supervised release, which would be suspended upon his return to his home country.
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Supportive Letters Submitted
As part of his defense, Costa submitted letters of support from his family and endorsements from a Brazilian federal judge and a partner at Pinheiro Neto Advogados. Costa previously worked at this Brazilian law firm. The outcome of Wednesday’s sentencing hearing will determine the resolution of this insider trading case, shedding light on the consequences faced by a lawyer accused of breaching trust and exploiting confidential information.
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