Wednesday, 22 February 2017
Last updated 13 hours ago
Jun 19 2013 | 9:47am ET
Two hedge fund managers convicted of insider-trading can stay out of jail for at least the next several months, a federal appeals court ruled yesterday.
The U.S. Second Circuit Court of Appeals in Manhattan allowed Level Global Investors co-founder Anthony Chiasson and former Diamondback Capital Management portfolio manager Todd Newman to remain free on bail, pending the appeal of their conviction. The court is not likely to hear that appeal until this coming December or January, meaning the Chiasson and Newman are likely to remain free for the better part of the year.
Newman had been due to report to prison on July 8 and Chiasson on Aug. 13.
Chiasson was sentenced to six-and-a-half years in prison and Newman four-and-a-half. The two men were convicted of membership in a larger insider-trading circle that dealt in tips about technology stocks. Prosecutors say the two earned their firms $68 million trading in Dell Inc. and Nvidia shares.
The Second Circuit's decision—and a comment from one of the judges during the hearing—indicate that court believes that there is a "substantial question" of law to be determined. U.S. Circuit Judge Barrington Parker said he expects "a lively appeal."
Chiasson and Newman are expected to argue that U.S. District Judge Richard Sullivan, who oversaw their trial, erred in his jury instructions by failing to specify that they had to know that the insiders leaking the information were doing so for personal benefit.