Here’s proof that there is life after securities fraud: Danny Kuo, who pleaded guilty in 2012 to swapping illegal stock tips, asked a judge on Tuesday to delay his sentencing so he can attend next month’s commencement ceremony at the University of Southern California’s Marshall School of Business and receive his MBA.
Kuo was working as an analyst at Whittier Trust, which is based in South Pasadena, Calif., when he ran afoul of the Justice Department. Going to business school gave Kuo a productive way to fill the time between pleading guilty to securities fraud charges and his eventual sentencing. “He thought it would be a good way to improve his résumé during a period … when he had difficulty working because of the pendency of this case,” his lawyer, Roland Riopelle, said in an interview. Kuo has even been telling his classmates about his experience, his lawyer said, as a way to warn others about insider trading.
Amy Blumenthal, a spokeswoman for Marshall, confirmed Kuo is enrolled as an MBA student in the school’s part-time program. She wouldn’t comment on his guilty plea or the school’s knowledge of his record.
If Kuo does graduate with his business-school classmates in May, he will have steered quite a different course than Michael Martoma, the former SAC Capital manager convicted of insider trading in February. Martoma was stripped of his MBA from Stanford’s Graduate School of Business after it emerged during the trial that he had lied on his application.
Kuo plead guilty in April 2012 to sharing illegally obtained information on tech companies Nvidia (NVDA) and Dell with a group of hedge-fund analysts. The group, which shared tips by e-mail, modeled itself after the underground alliance depicted in the movie Fight Club, according to courtroom testimony. (“Rule No. 1 about e-mail list, there is no e-mail list.”)
Like Kuo, other Wall Street professionals convicted of breaking rules before and after the 2008 financial crisis have sought redemption or self-improvement over the years. Bloomberg Businessweek recently caught up with Jérôme Kerviel, the the former Société Générale (GLE:FP) trader who faces a three-year prison sentence in France for his role in a multibillion-dollar fraud. Kerviel was walking the 870 miles from Rome to Paris as a way of putting his misdeeds and future punishment out of his mind.
“Fabulous” Fabrice Tourre, meanwhile, has been pursuing a Ph.D. in economics at the University of Chicago, stirring a recent backlash when the school said the former Goldman Sachs (GS) banker would be allowed to teach economics to undergraduate honors students. The university later decided that he could fulfill his degree requirements by teaching graduate students instead.
Kuo pursued a less academic degree than Tourre and didn’t go for a high-profile penance tour like Kerviel. Business school would have been a natural choice for a person such as Kuo, who lists past stints at JPMorgan (JPM) and Merrill Lynch (BAC) on his LinkedIn (LNKD) profile. It remains to be seen whether U.S. District Court Judge Richard Sullivan will allow him to attend his graduation. By awarding a degree to Kuo, however, critics might contend that Marshall risks sending the message that business schools are untroubled accepting those who have broken the laws of business.
