Anthony Chiasson and Todd Newman are alleged to have profited
from insider information about Dell and Invidia.
In the sharp-elbowed world of Wall Street, Anthony Chiasson and Todd Newman stood out as two of the good guys.
Both were hard-working, below-the-radar types who eschewed the flashy lifestyle embraced by many millionaire hedge fund traders. Mr. Chiasson's mother told reporters that her son's idea of a fun weekend was to return to his hometown, Portland, Maine, to attend church. Mr. Newman, also originally from New England, worked out of Boston, where he is raising a family in Needham, Massachusetts, a low-key suburb.
Yet U.S. prosecutors say Mr. Chiasson and Mr. Newman were criminals, operating "a tight-knit circle of greed" along with others who trafficked in secret information about technology companies.
On Tuesday, Mr. Chiasson, 39, a co-founder of the now-defunct Level Global Investors, and Mr. Newman, 47, a former portfolio manager at Diamondback Capital Management, were to stand trial in a U.S. District Court in New York City. Prosecutors say they were part of a conspiracy that made about $68 million illegally trading the computer company Dell and the chip maker Nvidia.
Six other traders have pleaded guilty. Some are expected to testify against Mr. Chiasson and Mr. Newman.
The trial of Mr. Chiasson and Mr. Newman is expected to shed light on the trading strategies and techniques of SAC Capital Advisors, based in Stamford, Connecticut, a hedge fund giant run by the investor Steven A. Cohen.
SAC Capital, which has one of the best investment track records on Wall Street, has become a breeding ground for hedge fund managers. Both Level Global and Diamondback were started by traders who trained under Mr. Cohen. And one of the six traders who have admitted to the conspiracy was employed at SAC Capital.
The case is one of the larger prosecutions brought by the government in its broad investigation into insider trading, which has yielded many convictions and resulted in prison sentences for dozens of hedge fund traders. Last month, Rajat K. Gupta, a former director of Goldman Sachs, was sentenced to two years in prison after a jury found him guilty of leaking boardroom secrets about the bank to the billionaire Raj Rajaratnam, a former hedge fund chief who is serving an 11-year term.
Most of the defendants in the insider trading cases have pleaded guilty, but of the eight who have taken their cases to trial, all have been found guilty.
The Chiasson-Newman case is the outgrowth of an F.B.I. raid two years ago this month of Level Global and Diamondback. Last January, Preet Bharara, a U.S. attorney in New York, brought the criminal case against Mr. Chiasson, Mr. Newman and the others.
Among those accused of being co-conspirators with the defendants are Spyridon Adondakis, a former trader at Level Global who worked under Mr. Chiasson, and Jesse Tortora, a onetime Diamondback employee. Both men have pleaded guilty to charges of insider trading. They have cooperated with prosecutors and are expected to testify against their former colleagues.
Lawyers for Mr. Chiasson and Mr. Newman are expected to attack the men who are cooperating, accusing them of trying to curry favor with the government by accusing their bosses of being involved in
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