Ex-Hedge Fund Manager Gets Probation In Galleon Case

Aug 3 2012 | 10:24am ET

Another cooperating witness has been rewarded for his "substantial assistance" with a no-jail sentence for insider-trading.

Anthony Scolaro, a former Diamondback Capital Management trader who wore a wire as part of the government's probe, was sentenced to three years' probation yesterday. Scolaro's crimes could have put him in jail for 20 years, but prosecutors lauded his cooperation, saying he recorded at least 43 phone calls and "never complained or hesitated in providing assistance to the government."

Scolaro, who provided the first link between the Galleon Group 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 former Galleon manager Franz Tudor, who also cooperated.

U.S. District Judge William Pauley also ordered Scolaro to pay $275,890 in fines and forefeitures, calling his "a crime motivated by avarice and calculation." For his part, Scolaro said he made "a terrible mistake" and, "I humbly apologize to God."

Diamondback, which was never accused of any wrongdoing in the case and which is the only one of the four hedge funds raided in 2010 to have survived, thought he left out at least one apology.

The hedge fund was "disappointed that Scolaro did not apologize to Diamondback's investors, whose trust he abused in committing his crimes," a spokesman for the firm told Bloomberg News.


In Depth

U.S. Treasury Moves on Reinsurance Loophole

Apr 24 2015 | 5:11pm ET

The U.S. Treasury Department has released proposed rules aimed at limiting the ability...

Lifestyle

Artivest Announces Funding Round Led by KKR & Co.

May 4 2015 | 9:56am ET

Artivest, a startup that provides individual investors with access to private equity...

Guest Contributor

Starting a ‘40 Act Fund Family? Don’t Forget Your Board

Apr 30 2015 | 7:18am ET

The convergence of the hedge fund and mutual fund worlds continues unabated, as...

 

Editor's Note