Level Global co-founder Anthony Chiasson and Todd Newman, a former fund manager for Diamondback Capital Management LLC, used a 'corrupt chain' of insiders at public companies to make more than $70m for their funds, a prosecutor told a jury at the start of the men’s trial.
Bloomberg reports that Assistant U.S. Attorney Richard Tarlowe said Tuesday in opening statements in federal court in Manhattan that Chiasson and Newman were part of a group of portfolio managers, analysts and technology company employees who were friends and reaped millions of dollars by trading on illegal stock tips in Dell and Nvidia Corp.
Four members of the group agreed to plead guilty and will testify for the government, Tarlowe said.
Chiasson made more than $57m trading on Dell and about $10m on Nvidia, the prosecutor said. Newman made about $3.8m from Dell trades and earned about $48,000 on Nvidia, he said.
'They used a corrupt chain of people to get the information into the hands of the defendants', Tarlowe said.'The defendants chose to break the law. Why ? Because they wanted to make big money for themselves and for their hedge funds'.
Chiasson and Newman are charged with conspiracy to commit securities fraud and five counts of securities fraud. The latter crime is punishable by as long as 20 years in prison. Both men pleaded not guilty.
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