Newman, Ex-Diamondback Trader, Gets Four-Plus Years

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.


In Depth

Fundraising for Mid-Sized PE Funds: Should You Use a Registered B/D?

Dec 6 2016 | 7:18pm ET

When does a fund sponsor need to use a registered broker/dealer when raising capital...

Lifestyle

Trump Attends 'Villains and Heroes' Costume Party Dressed As...Himself

Dec 5 2016 | 11:16pm ET

U.S. President-elect Donald Trump attended a "Villains and Heroes" costume party...

Guest Contributor

A Hard Look At Your ‘Soft’ Hedge Fund Marketing Information

Dec 8 2016 | 9:03pm ET

Conventional wisdom holds that due diligence examines quantitative as well as qualitative...

 

From the current issue of

Since the inception of Modern Trader, a core editorial theme has centered on the wisdom and power of crowds. Editorial emphasis has focused on companies and projects engaged in the collection and analysis of information. 

AVAILABLE NOW at BARNES & NOBLE

NEWSTAND LOCATOR