The need to deter insider trading and to send a stern message to lawyers about violating client confidences led a federal judge yesterday to sentence former Ropes & Gray associate Arthur Cutillo to 2 1/2 years in prison.

Despite dire family circumstances and several other factors that cut in Mr. Cutillo’s favor, Southern District Judge Richard J. Sullivan said confidence in both the financial system and the legal profession were at stake as he sentenced the first of several defendants rendered guilty in the Zvi Goffer insider trading ring.

Mr. Cutillo, he said, violated the fundamental obligation of lawyers “to respect and protect the confidences of their clients” when he and fellow Ropes & Gray associate Brien Santarlas fed inside information to Mr. Goffer through a third attorney, Mr. Cutillo’s college friend, Jason Goldfarb.

“You were financially comfortable, you were a respected attorney making more than $200,000 a year and yet it wasn’t enough,” Judge Sullivan said.

The sentence was in line with the guidelines range advocated by prosecutors and the Probation Department’s pre-sentence report: 2 1/2 to three years and one month.

It was imposed over the argument of defense lawyer Catherine L. Redlich of Driscoll & Redlich, who sought a non-custodial sentence for several reasons, principally because of “exceptional family circumstances.”

Mr. Cutillo, a 2005 graduate of Villanova Law School, has lost his law license and now his wife, Maria Celeste, works to support the family. He is the primary caregiver for four children, two of whom have special needs.

Mr. Cutillo lost his younger brother to a probable drug overdose in 2007 and had entered a dark period in his life and was drinking heavily when he began stealing secrets on pending mergers and acquisitions by such Ropes & Gray clients as 3Com Inc., Ms. Redlich explained in her sentencing memorandum.

In court, Ms. Redlich said, “He lost his job, he’s been disqualified as a lawyer, he lost his home. …Financially, he’s in terrible straits.”

“The collateral consequences for Mr. Cutillo have been very punitive,” she said.

Judge Sullivan said he recognized all that, including Mr. Cutillo’s difficult family circumstances, but he said the other side of the argument was that the ex-attorney was “raised to know better,” and was putting his family at risk by stealing the information.

In their sentencing memorandum, prosecutors Andrew L. Fish and Reed M. Brodsky argued that “Cutillo’s crimes were brazen. Cutillo used his intelligence, advanced degree, and privileged position at Ropes & Gray to do harm rather than good.”

In court yesterday, Mr. Fish stressed the need for general deterrence, saying “a message needs to be sent to people—if you get caught, the penalty is going to be high.”

When Mr. Cutillo, Mr. Santarlas and Mr. Goldfarb were “in a bar or whatever” talking about the conspiracy, Mr. Fish said, they were not thinking about getting caught, “they were thinking about the money.”

The money was the $32,500 the three were each paid to feed insider information to Mr. Goffer, who was convicted June 13 along with his brother, Emanuel Goffer, and their partner, Michael Kimelman (NYLJ, June 14).

Mr. Santarlas, who has pleaded guilty, cooperated with the government in return for leniency at his Oct. 28 sentencing, telling the jury how he and Mr. Cutillo snooped around Ropes & Gray overhearing gossip, looking at computer files and reading documents from office copiers (NYLJ, May 24). He told how they used disposable cell phones and hid their money in safe deposit boxes and how they met with Mr. Goldfarb in his car, in bars and on the street to avoid detection.

Mr. Cutillo pleaded guilty on Jan. 14 to insider trading and conspiracy to commit insider trading. Yesterday, he spoke briefly before the court, saying, “I just want to apologize to everybody” and would always be “ashamed” of betraying his law firm and its clients.

In addition to the prison term and two years of supervised released, Judge Sullivan entered a forfeiture judgment against Mr. Cutillo, for which Zvi Goffer and Mr. Santarlas are jointly and severally liable, in the amount of $378,068—the amount of money gained by Mr. Goffer.

The sentence is one indication of what Mr. Goldfarb is facing when he is sentenced by Judge Sullivan on Aug. 19. The judge has a number of sentences ahead of him, including the Goffer brothers, Mr. Kimelman, and Craig Drimal, who received some of the Ropes & Gray information and traded on it to make millions for Galleon Group hedge fund.

Zvi Goffer is set to be sentenced on Sept. 21; Emanuel Goffer and Michael Kimelman, a one-time lawyer, on Oct. 7; and Mr. Drimal on Sept. 9.

All the defendants, and more, were swept up in a series of insider trading prosecutions that climaxed with the conviction of Galleon Group founder Raj Rajaratnam on May 10 (NYLJ, May 11). Mr. Rajaratnam is scheduled to be sentenced by Judge Richard J. Holwell on Sept. 27.