Hedging your bets

They were the best of friends, they were the worst of friends…

Best man caliber best friends.

That was until insider trading made a mess of their BFF-hood, and the Feds played an opening round of prisoner’s dilemma with Noah Freeman. Freeman made the rational, yet slimy, move of ratting out the best man at his last year’s wedding, Donald Longueuil. Of course, it wasn’t really much of a prisoner’s dilemma, as Longueuil hadn’t yet been invited to play.

In this game, first in apparently gets the advantage, and Freeman has likely parlayed his willingness to wear a wire to get his friend (perhaps ex-friend is the better term) to agree that they had both traded on insider information into what will likely be a lesser sentence.

As attorney Solomon Wisenberg explains in his blog post on Freeman’s guilty plea, Freeman doesn’t yet know what sentence he will receive in return for his plea and for co-operating with the Feds. (He is theoretically facing 25 years in the stir, which will cut quite a swath in his career path and life. Freeman’s 35.) But, as Wisenberg notes, this is a tactic that will allow Freeman, when he’s on the witness stand against Longueuil, to say he co-operated without any guarantees in return – when, in all wink-wink, nudge-nudge likelihood, he will get off with greatly reduced prison time, and perhaps even probation. Thus, Freeman may be the eponymous free-man, not to mention a Noah who was pretty darned quick to hoist the gangplank to his own personal ark.

But what are friends for, when it comes to facing jail time?

Which is certainly likely what will happen to Longueuil, unless he coughs up an even bigger fish for this fish-fry.

While he was doing buddy talk with Freeman, Longueuil also detailed how, after he’d read a Wall Street Journal article on a widening (or narrowing, depending on whose neck’s being fitted for the noose) investigation that was starting to get a little too darned close, he panicked:

Using two pairs of pliers, he destroyed the computer hard drives where the government said he kept inside information, according to last week's complaint.

At 2 a.m., a few hours after the Journal article was published, Mr. Longueuil left his New York apartment with another person, according to the complaint against him. He walked 20 blocks and dumped mangled pieces of computer drives in four separate garbage trucks, according to the complaint. (Source: Wall Street Journal.)

What makes this story more interesting than most every-day insider trading scandals is the back story. If Wall Street (the original, anyway) made for good Hollywood, what will they be able to make of the story lines here?

• Both Freeman and Longueuil were competitive speed-skaters, which is how they met. (Longueuil had been a 2002 Olympic hopeful.)
• Several years back, Longueuil talked Freeman off the metaphorical ledge after his (apparently prescient) fiancée dumped him. (“'I needed Don to get me out of bed this morning,’ he said at one point, according to the person familiar with the situation.”)
• Freeman, whose broken heart recovered, proposed to his now wife in the midst of a triathlon.
• Freeman worked out with a triathlon team called "Team Psycho," but they turned down his membership application because “he didn't always support others with what the club describes as positive ‘psycho karma.’” Bet the Team Psychos are feeling pretty good about that decision.
• Longueuil’s fiancée, a Princeton crewmate of Freeman’s wife, has the wondrously preppy name of P. Mackenzie Mudgett. (The couple, meanwhile, has postponed their nuptials, which had been scheduled for this coming weekend. And at which Freeman had been slated to act as best man – one stand up guy standing up for another. Any takers on whether this wedding ever goes through? Could have been worse. Insider trading’s bad, but it’s not like Longueuil turned out to be the Craigslist killer.)
• Mudgett, while not charged with anything, was apparently the second party who accompanied Longueuil on his 2 a.m. Manhattan reverse dumpster dive. Wonder how he explained that to her. “Hey, honey, I’ve got to run out for a few minutes. Wanna come help me toss baggies full of incriminating evidence into some garbage trucks?”
• Mudgett and Longueuil had served as volunteer bellringers for the Salvation Army this past Christmas. (Awwwwwwwwww. Bet they even wore matching Santa hats.) (Source: UK Daily Mail.)
• Then there’s the rabbi who’s in prison because he tried to shakedown SAC Capital, where Freeman and Longueuil traded, for money to fund a school he runs, but claiming that he’d blow the whistle on insider trading there if he didn’t get the mega-donation he was soliciting. (That’s another whole story.)

Meanwhile, Freeman has been given permission, while he awaits his sentencing, to jet off to St. Croix and Puerto Rico to compete in triathlons there. The St. Croix event is where he proposed to his wife a few years back. Sentimental guy. Have I said “awwwwwwww” already? Or maybe he’s thinking that he better get his last couple of Iron-man’s in, just in case he does end up doing some time. Which, god knows, he ought to. Jeez. If Martha Stewart goes to prison for making chump change on an insider-info inspired trade, someone whose hedge fund comped him 20% on his trades – which were a whole lot bigger than Martha’s – ought to wear the orange jumpsuit for a bit.

While it’s hard to expend much sympathy on a couple of greedy hedgies who got caught with their yellow suspenders down, it’s hard not to cough up a smidgeon of inter-personal sympathy for Longueuil.

Not only is he looking at a hefty prison sentence, he has to live with the fact that his best man – for all his big, strong triathlon-ism – dimed him. Sure, Longueuil might well have done the same thing if the bread crumbs had led to his door first, instead of to Freeman’s. But they didn’t.

As for the plea non-bargain that Freeman struck, if it turns out that they were equally culpable, it really won’t seem fair if he gets off with zippo, while Longueuil does hard time.

How about they split the difference, and give them both 12.5 years?

Maybe they can even be cell-mates.

Justice served!