Paul, Weiss Secures Second Circuit Victory on Behalf of Hedge Fund Founder

Paul, Weiss won a major appeal at the Second Circuit when the court vacated and remanded our client Murray Huberfeld’s 30-month sentence and reversed the lower court’s $19 million restitution order against him.

The Manhattan U.S. Attorney’s underlying case against Mr. Huberfeld, co-founder of the defunct Manhattan hedge fund Platinum Partners, stemmed from a $60,000 cash payment he admitted making to the president of a union that invested $20 million in Platinum, and which subsequently lost almost all of its investment when Platinum filed for bankruptcy. Mr. Huberfeld was initially charged with conspiracy to commit commercial bribery as well as wire fraud, but after a trial resulted in a hung jury, the government dropped its bribery charge, and, represented by previous counsel, Mr. Huberfeld pleaded guilty to wire fraud in May 2018. After the court imposed a 30-month sentence, more than double the high end of the applicable sentencing range, Mr. Huberfeld retained Paul, Weiss for his appeal in March 2019; oral arguments were held in February 2020.

In an opinion echoing arguments made by Paul, Weiss, the Second Circuit held that the district court erred by applying the sentencing guideline for commercial bribery based on an uncharged bribery scheme that the government dropped in exchange for Mr. Huberfeld’s guilty plea. It further held that the district court was obligated to use the fraud guideline, which yielded a sentencing range of 6 to 12 months’ imprisonment, and could not apply the guideline for bribery when the charging document did not set forth conduct constituting a bribery offense. The court also reversed the $19 million restitution order, finding that the district court erred in ordering our client to pay restitution to the union, because the union was not a victim of the wire-fraud offense.

The Paul, Weiss team included litigation partner Kannon Shanmugam, who presented oral argument.