Chiasson, Newman Defense Lasts Less Than One Day

Dec 11 2012 | 10:27am ET

Lawyers for Level Global Investors founder Anthony Chiasson and former Diamondback Capital Management portfolio manager Todd Newman are either extremely confident that their clients will be the first in recent years to beat an insider-trading rap, or they are resigned to trying their hand at an appeal.

Prosecutors spent three weeks building their case against the two men, who are accused of participating in a scheme that netted nearly $70 million in illegal profits. But the defense lasted less than a day: Chiasson's and Newman's legal teams called just one witness yesterday, a Federal Bureau of Investigation agent, before resting. Closing arguments are set for tomorrow.

Newman's lawyer briefly questioned the agent about the government investigation.

The move to put up little or no defense could be a sign that the former hedge funders believe that the government has failed to prove its case. If they are right, it will be a first: Prosecutors have won upwards of 70 guilty verdicts, most of them plea deals, and have yet to lose a guilty verdict in the recent crackdown on insider-trading.

For their part, prosecutors spent days questioning their two star witnesses, former Level Global analyst Spyridion Adondakis and former Diamondback analyst Jesse Tortora. The defense also spent days cross-examining those witnesses.

Depending on how long closing statements go, the jury could get the case as soon as tomorrow afternoon.

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