Thursday, 23 February 2017
Last updated 8 hours ago
Jan 18 2012 | 10:04am ET
The Federal Bureau of Investigation today arrested seven people, including at least three hedge fund traders, as part of a massive federal probe into insider-trading.
The arrests of Anthony Chiasson, of founder of Level Global Investors, and Todd Newman, a former manager at Diamondback Capital Management, have been expected since late last year. The arrest of Jon Horvath, an analyst at SAC Capital Advisors' Sigma Capital Management, is a first in a pair of high-profile insider-trading probes that have ensnared some 50 people: No current SAC employee had previously been implicated.
Charges against the seven are expected to be made public today at a 1 p.m. news conference with U.S. Attorney Preet Bharara.
Newman was arrested in Boston and Horvath in New York. Chiasson surrendered to authorities in New York, after FBI agents found that he was not at his home in the city before 6 a.m.
The charges stem from the government's ongoing probe into expert-network Primary Global Research. In November 2010, the FBI raided the offices of four hedge funds, including Level Global and Diamondback. Three of those four hedge funds have since closed, with only Diamondback still standing. Neither Diamondback nor any of its current employees have been accused of any wrongdoing.
A former Level Global analyst, Spyridion Adondakis, and a former Diamondback analyst, Jesse Tortora, are cooperating with prosecutors. The two men were allegedly part of an insider-trading circle with Horvath and Abbasi, and worked under Chiasson and Newman, respectively.
Today's arrests bring to 18 the number of people charged in the Primary Global case. Twelve have pleaded guilty, including several hedge fund managers, and two have been convicted by juries.