New York (HedgeCo.Net) – A New York judge has thrown out the conviction against hedge fund managers Anthony Chiasson, co-founder of hedge fund Level Global Investors, and Todd Newman, a former portfolio manager at hedge fund Diamondback Capital Management.

“Because the Government failed to present sufficient evidence that the defendants willfully engaged in substantive insider trading or a conspiracy to commit insider trading in violation of the federal securities laws, we reverse Newman and Chiasson’s convictions and remand with instructions to dismiss the indictment as it pertains to them with prejudice, ” the DOJ said.

The hedge fund executives are among dozens ensnared in the government’s recent insider trading crackdown. Unlike most defendants, though, Chiasson and Newman did not strike plea agreements and brought their case to trial, only to be convicted on all counts they faced related to trades ahead of earnings reports that Dell and Nvidia released in 2008 and 2009.

Chiasson and Newman were accused by prosecutors of taking part in a “criminal club” of finance professionals that used their connections to trade illegally. Also charged by criminal authorities and sued by the SEC were Jesse Tortora, an analyst for Newman; Spyridon “Sam” Adondakis, an analyst for Chiasson; Danny Kuo, a vice president and fund manager at Whittier Trust Co.; Jon Horvath, a technology analyst at Sigma Capital Management; and Sandeep “Sandy” Goyal of mutual fund company Neuberger Berman Group LLC. All of those individuals have pled guilty and settled the SEC’s claims.

Level Global and Diamondback were also sued by the SEC. The firms settled for $21.5 million and $9 million, respectively.

Alex Akesson
For HedgeCo.net
alex@hedgeco.net
HedgeCo.Net is a premier hedge fund database and community for qualified and accredited investors only. Membership in HedgeCo.net is FREE and EASY. We also offer FREE LISTINGS for Hedge Funds!