Chiasson, Newman Lawyers Point Fingers At Subordinates

Nov 14 2012 | 12:28pm ET

Lawyers for two hedge fund managers accused of insider-trading took vicious aim at their clients' former employees as their clients' trial opened in earnest yesterday.

Level Global Investors co-founder Anthony Chiasson and former Diamondback Capital Management portfolio manager Todd Newman are accused of being at the helm of a "criminal club" that earned more than $60 million in illegal profits trading on confidential corporate information. But their lawyers say they are guilty only of hiring badly.

"The biggest mistake Todd Newman ever made, and the reason he's sitting here today, is because he hired Jesse Tortora," Newman's lawyer, Stephen Fishbein, told the jury in his opening statement, referring to one of the government's star cooperating witnesses. Chiasson's lawyer, Reid Weingarten, took aim at the other, Spyridion Adondakis, a former analyst at Level Global, who he called "an easy, practiced liar" whose "word cannot be trusted."

Prosecutors countered that Tortora and Adondakis, along with the other witnesses in the case—the four men charged alongside Chiasson, Newman, Adondakis and Tortora have all pleaded guilty, are all cooperating with prosecutors and could be called to testify—"will paint a picture of a corrupt network of professionals who chose to break the rules and to trade on inside information all in order to make a quick buck," as Assistant U.S. Attorney Richard Tarlowe told the jury.

Tarlowe showed the jury some of the evidence his side will present during the trial, which could last six weeks. Among the items referenced were e-mails and other correspondence between the defendants and the cooperating witnesses that the government says proves Chiasson and Newman had insider information.

The defense didn't quarrel with the notion that the other six charged in the case were part of a "clique" that shared secrets. They simply say that the clique didn't include their bosses, Chiasson and Newman.

If convicted, Chiasson and Newman each face up to 25 years in prison. Prosecutors have yet to fail to win a conviction at trial in their recent crack-down on insider-trading.


In Depth

Whisky Business: The Ultimate Liquid Alternative Investment

Sep 15 2014 | 7:02am ET

David Robertson knows his single-malt whisky—he was the Master Distiller at the...

Lifestyle

Hedgies Rock Out For Children's Charity

Sep 15 2014 | 8:40am ET

It's that time of year again—when hedgies trade in their spreadsheets for guitars...

Guest Contributor

Volkered: How Financial Sector Reforms are Creating Opportunities for Hedge Funds

Sep 16 2014 | 11:28am ET

New regulations have dramatically curtailed proprietary trading activity in investment...

 

Editor's Note

    Get A Sneak Peak Of The Alpha Pages

    Aug 25 2014 | 11:21am ET

    As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…

 

Futures Magazine

September 2014 Cover

The London Whale: Rogue risk management

Credit default swaps brought down the London Whale and cost JPMorgan $6.2 billion. Here is how it happened.

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.