Saturday, 25 October 2014
Last updated 20 hours ago
May 3 2013 | 9:39am ET
Former Diamondback Capital Management portfolio manager Todd Newman was sentenced to four-and-a-half years in prison yesterday for insider trading.
Newman was convicted of fraud and conspiracy alongside Level Global Investors co-founder Anthony Chiasson in December, and faced up to six-and-a-half years. U.S. District Judge Richard Sullivan also ordered Newman to disgorge $737,724 and to pay a $1 million fine.
Newman, who plans to appeal his conviction, did not speak at the hearing. His lawyers had sought leniency for their client, arguing that he did not personally profit much from the $72 million scheme.
Sullivan did not appear to have much time for that line of reasoning.
"This was all about money and getting more," the judge said. "It's hard to explain how someone would do that where they had so much."
Newman's co-defendant, Anthony Chiasson, will be sentenced in two weeks.
As bad as yesterday must have been for Newman—Sullivan has yet to rule on whether he'll be allowed to remain free on bail pending his appeal—it was little better for his former employer, which is seeking $39 million from its former trader. Sullivan, who will determine whether Diamondback gets anything, did not sound sympathetic to the hedge fund, which closed its doors last year.
"It is hard to get one's head around the idea that Diamondback is a victim when Diamondback could have been charged as a corporate entity," Sullivan said.
Sep 22 2014 | 4:15pm ET
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