Monday, 25 July 2016
Last updated 58 min ago
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.