Monday, 31 August 2015
Last updated 2 days ago
Jul 26 2012 | 1:26pm ET
In the federal government's probe of insider-trading, one hedge fund wire-wearer appears to have begotten another.
Federal prosecutors yesterday lauded the "substantial assistance" offered by former Diamondback Capital Management portfolio manager Anthony Scolaro, who is to be sentenced on conspiracy and securities fraud charges next week. According the U.S. Attorney's Office in Manhattan, Scolaro recorded at least 43 phone calls while cooperating with the Federal Bureau of Investigation, helping develop "leads and other valuable information."
"Scolaro's timely cooperation with the government was substantial," prosecutors Reed Brodsky and Antonia Apps wrote. "Scolaro's cooperation provided the government with valuable information about the hedge fund industry and the use of matchmaking firms. Scolaro's cooperation led directly to several investigations."
Scolaro's cooperation was apparently the result of another wire-wearer's: Franz Tudor, a former Galleon Group trader. Tudor was sentenced to three years' probation last month after prosecutors credited him with turning Scolaro.
Scolaro, who provided the first link between the Galleon case and the expert-network case that led to the FBI raid on Diamondback and three other hedge funds, pleaded guilty in November 2010 to trading on confidential information he received from Tudor. He faces up to 20 years in prison when he is sentenced on July 30.
According to Brodsky and Apps, Scolaro met with the FBI some 75 times over the year-and-a-half before his case was unsealed in May 2011. "Since being approached by the FBI, Scolaro never complained or hesitated in providing assistance to the government."
May 27 2015 | 2:15pm ET
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