Former Nuveen trader behind $47M insider scheme seeks leniency

A former Nuveen trader asked a federal judge not to impose a harsh sentence on him for front-running the firm’s trades as part of a scheme that generated more than $47 million in illegal profits.

Lawrence Billimek, who will be sentenced on May 20, faces as many as seven years in prison under federal guidelines. In a recommendation filed on Monday, Billimek’s lawyers didn’t suggest a specific term but simply asked US District Judge Paul Gardephe in Manhattan for the “most lenient sentence,” arguing the ex-trader had suffered enough by losing his career and reputation.

Federal prosecutors will file their own recommendation before Billimek’s sentencing and are likely to ask for more than six years in prison.

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.

Financial Insecurity

The case was one of the first in which the Securities and Exchange Commission’s Consolidated Audit Trail — a controversial database tracking almost all US market activity — was credited with catching insider traders. In Monday’s filing, Billimek’s lawyer, Marc Mukasey, said the use of the CAT helped ensure that the case was well-publicized within the financial industry, so a stiff sentence wasn’t necessary to deter others.

“The news about this case and this new powerful tool being deployed by the SEC in itself provides an extra level of general deterrence,” Mukasey wrote. Billimek was fired from Nuveen shortly after his arrest in December 2022.

Mukasey said his client acknowledges that his crime was serious and “deserving of punishment” but stressed that it wasn’t due to greed. Instead, Mukasey said Billimek’s difficult youth, in which he experienced foreclosure of his family home, his father’s bankruptcy and the breakup of his parents’ marriage, left him deeply scarred and obsessed with providing for his family.

“He was determined to build a different – and more stable – life than the one he grew up in,” Mukasey wrote. “Ultimately, this objective engulfed him and led to his downfall.”

Not Like Martoma

Billimek’s fears of financial insecurity grew after he was laid off from his job as a trader at Invesco Ltd. in 2009, Mukasey said. He was unemployed for two years before he was hired at Nuveen in San Francisco. But even then, Billimek felt like he was barely making ends meet in the expensive Bay Area, according to Monday’s filing.

“Determined never to let his wife and kids feel the discomfort, and fearful of losing his ability to provide for them, Larry began a corrupt course of dealing with Alan Williams,” Mukasey said.

The lawyer sought to distinguish Billimek from other insider traders, particularly former SAC Capital portfolio manager Mathew Martoma. Mukasey cited the judge who sentenced Martoma to nine years in prison and criticized him for turning to crime despite a privileged upbringing.

“Larry Billimek could not be more different,” Mukasey wrote, adding that “Larry did corrupt things to try to alleviate his fears, but he never became a corrupted person.” The case is US v Billimek, 22-cr-675, US District Court, Southern District of New York (Manhattan).