Level Global Co-Founder, SAC Manager Co-Conspirators, Judge Says

Dec 7 2012 | 12:17pm ET

The judge presiding over the trial of Level Global Investors co-founder Anthony Chiasson has ruled that Level Global's other founder, David Ganek, and a SAC Capital Advisors portfolio manager are co-conspirators in the insider-trading case.

U.S. District Judge Richard Sullivan's ruling yesterday means that prosecutors can present evidence involving Ganek and SAC's Michael Steinberg, neither of whom have been charged with a crime, at the trial, which also features former Diamondback Capital Management portfolio manager Todd Newman. The judge rejected the arguments of Chiasson's and Newman's lawyers that the government had not shown that Ganek and Steinberg, who is on leave from SAC, were involved. Chiasson's lawyer, Gregory Morvillo, said that "the government's conclusions with regard to those events are firmly undercut by the totality of other evidence in the record, including their own witness' testimony."

But Sullivan, citing e-mail evidence, said, "Ganek is expressing awareness of [cooperating witness and former Level Global analyst Spyridion] Adondakis' Dell contact. Statements made by Ganek and his conversations during this time do suggest that he understands Adondakis is not just any analyst crunching numbers."

As for Steinberg, the judge said, "These e-mails which are in relation to Steinberg do indicate to me that there is an inference, more likely than not, that he understands the source of the information that he's getting and he's trading on it."

Sullivan's ruling came in spite of testimony from Adondakis this week and last, in which Adondakis, under cross-examination, said he did not "discuss" or "disclose the source" of his information with Ganek.

"Did you implicate Mr. Chiasson in insider trading?" Chiasson lawyer Reid Weingarten asked.

"Yes," Adondakis said.

"And what about Mr. Ganek?"

"I don't know about Mr. Ganek," Adondakis said.

Still, prosecutors argued that there "are a lot of circumstantial facts showing Mr. Ganek was provided with actual numbers and had sufficient circumstantial evidence to show that he knew those numbers, that you can't ordinarily get, that the numbers would have had to come from an inside source," Assistant U.S. Attorney Antonia Apps said.

Neither Steinberg nor SAC would comment. But Ganek's lawyer said, "more relevant" than his client's co-conspirator status "is the testimony from the government's star witness that David Ganek was not told about inside information, and the fact that after a two-year investigation my client has not been charged by anyone with doing anything wrong."

Level Global shut its doors shortly after its offices were raided by the Federal Bureau of Investigation in November 2010. Diamondback announced its closure this week.

Chiasson's and Newman's trial is set to resume on Monday.


In Depth

Why Ponzi Schemes Work: An In-Depth Look At The Allen Stanford Fraud

Dec 21 2014 | 10:30am ET

Texan Allen Stanford first appeared on the radars of financial regulators in 1997...

Lifestyle

Hedgie Funds US Squash Program

Dec 24 2014 | 8:46am ET

Squash, anyone?

Guest Contributor

EidoSearch’s Top Three Market Projections For 2015

Dec 23 2014 | 4:03am ET

It is that time of year again when prognosticators make their big market calls for...

 

Sponsored Content

Editor's Note

    Guidelines for Guest Articles

    Oct 22 2014 | 9:46am ET

    We are always looking for guest articles from hedge fund managers and buy-side firms.

    If you are interested in submitting a contributed piece for possible publication on FINalternatives, please take a look at the specs. Read more…

 

Futures Magazine

December 2014 Cover

Futures 2014 person of the year

Jeff Sprecher was simply looking for a platform to trade energies when launching ICE 14 years ago but it has grown to reach the pinnacle of both the listed futures and equities world.

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.