Ex-Gibson Dunn Lawyer Sentenced to 2 Months for Insider Trades

A visiting Brazilian attorney who was employed by <-bsp-bb-link state="{"bbHref":"bbg://securities/1128L%20US%20Equity","_id":"0000018c-8829-db9e-abee-893da6970000","_type":"0000016b-944a-dc2b-ab6b-d57ba1cc0000"}">Gibson, Dunn & Crutcher in the US must spend two months in prison after pleading guilty to insider trading in shares of companies represented by the law firm.

Romero Cabral Da Costa Neto, 33, was sentenced by US District Judge Carl J. Nichols in Washington Wednesday. “In my view, the conduct here is egregious,” said Nichols. Costa’s decision to trade on confidential information wasn’t “spur of the moment or reactive,” he added.

The sentence was less than what prosecutors had asked Nichols to impose. Prosecutors had pushed for an eight-month prison term, on the low end of the guidelines range.

Costa, who didn’t work on mergers, accessed his law firm’s computer system and used search terms to find inside information, said Kevin Rosenberg, an attorney for the government. “Mr. Costa didn’t just happen upon this information. Mr. Costa was stealing information from other law firm partners,” Rosenberg said.

Costa had asked for a sentence of time he already served and leaned on recent changes to US Sentencing Guidelines that recommend a lighter sentence for defendants with no criminal history.

“I’m deeply sorry,” said Costa during the sentencing.

Costa’s attorney, <-bsp-person state="{"_id":"0000018c-8829-db9e-abee-893da69a0000","_type":"00000160-6f41-dae1-adf0-6ff519590003"}">Blake Goebel, described the conduct of his client as “a major aberration in what has otherwise been an exemplary life.” Costa is a devoted family man and hasn’t been able to see his wife and young daughter, who live in Brazil, said Goebel.

Costa earned more than $200,000 a year working as a visiting attorney focused on Foreign Corrupt Practice Act matters since September 2022, according to court records.

In August, the US attorney for the District of Columbia accused Costa of using confidential information to make trades on deals advised on by Gibson Dunn, including the purchase of <-rte-company state="{"_id":"0000018c-8829-db9e-abee-893da69b0000","_type":"00000160-4b23-d8bd-adfd-4b3348fd0000"}">CTI BioPharma Corp. by Orphan Biovitrum AB. Costa has also reached an agreement with the <-bsp-bb-link state="{"bbHref":"bbg://securities/13165Z%20US%20Equity","_id":"0000018c-8829-db9e-abee-893da69b0001","_type":"0000016b-944a-dc2b-ab6b-d57ba1cc0000"}">Securities and Exchange Commission in a parallel civil enforcement case against him alleging substantially similar conduct, his attorneys said in a court filing.

Costa made more than $42,000 in profits on CTI BioPharma by selling 10,400 shares after the deal was announced, according to the US government.

The case is USA v. Da Costa Neto, 23-cr-00371, US District Court, District of Columbia (Washington, DC)

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<-bsp-person state="{"_id":"0000018c-8829-db9e-abee-893da69d0000","_type":"00000160-6f41-dae1-adf0-6ff519590003"}">Sabrina Willmer in Washington at swillmer2@bloomberg.net

To contact the editors responsible for this story:
Sara Forden at sforden@bloomberg.net

Elizabeth Wasserman, Anthony Aarons

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