The head of arbitrage at Goldman Sachs & Co., he was identified as a possible target in an insider trading scandal in November 1986,[2] and arrested on February 12, 1987.[3] The case was prosecuted by Rudolph Giuliani, then United States Attorney for the Southern District. According to the prosecutor, the case involved insider-trading information bought by Ivan Boesky from Martin A. Siegel, of Kidder, Peabody, who in turn got his information from Freeman.[4] Freeman eventually pleaded guilty to one count of mail fraud, served four months in Federal Prison Camp, Pensacola at Saufley Field, Florida.[5] On June 7, 1993, he agreed with the SEC to a three-year suspension from the securities industry and to surrender $1.1 million, in connection with the 1986 leveraged buyout of Beatrice Companies Inc. by Kohlberg Kravis Roberts.[6]
In 2011, New York Times blogger William D. Cohan wrote that Freeman was an innocent victim of a prosecutorial "witch hunt," whose mail fraud conviction was unconnected to any insider trading.[5] In reply, Seeking Alpha author Jonathan Bernstein described Freeman as a "guilty bystander" in the search for evidence against Ivan Boesky and Michael Milken. According to Bernstein, Freeman's mail fraud conviction "was actually about insider trading".[7]
