Level Global Founder Trial Begins

Nov 7 2012 | 3:39pm ET

The latest in a string of hedge-fund insider-trading trials got underway this morning in New York, as jury selection began in the case against Level Global Advisors founder Anthony Chiasson and former Diamondback Capital Management trader Todd Newman.

The government remains undefeated in such cases, and the odds against Chiasson and Newman look long. Two former co-defendants have struck plea deals with prosecutors, who also have two other cooperating witnesses in the case. And the two will face the same mountain of wiretap evidence that has helped sink the five men who have previously faced trial in the government's ongoing crackdown.

The trial was originally scheduled to start on Oct. 29, but was delayed by Hurricane Sandy.

Prosecutors have accused Chiasson and Newman of being part of a $60 million insider-trading ring. The offices of Level Global and Diamondback were raided by the Federal Bureau of Investigation two years ago, and the indictments allege that "a club where everyone scratched everyone else's back" traded tips in 2008 and 2009, primarily about technology companies.

U.S. District Judge Richard Sullivan, who presided over the second Galleon Group trial last year, is on the bench for this one.

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