April 1990

Giuliani Called Too Zealous in Goldman Sachs Case

There was a long-held suspicion of insider trading in nearly every major takeover in the 1980s. “It was like free sex,” said the head of one of Wall Street’s largest investment banks. “You definitely saw the abuses growing, but you also saw the absence of people getting caught.”



Sweeping charges were leveled by the government and then dropped in 1987, five months after prosecutors arrested Robert A. Freeman of Goldman Sachs and two other traders, one being led from his office in handcuffs and another spending a night in jail before being charged.

The former head of risk arbitrage at Goldman was sentenced to four months in prison and fined $1 million for a single incident of insider trading.



Mr. Giuliani later said the case was perhaps the biggest mistake he had made as a prosecutor because the indictment had been brought too hastily.

