Prosecutors rack up more insider trading convictions
Are the jury convictions of Anthony Chiasson, co-founder of Level Global, and Todd Newman, formerly of Diamondback Capital, enough to make Mathew Martoma think twice about rolling the dice at a trial?
The two were convicted on 10 counts of conspiracy and securities fraud for insider trading and will face jail time when they are sentenced in April. Once again, the government was able to rack up victories without wiretap evidence that directly implicated the men.
Instead, the Financial Times notes that courts relied on "emails, instant messages, phone and trading records and the testimony of two analysts, Spyridon Adondakis, formerly of Level Global, and Jesse Tortora, formerly of Diamondback. Both men pleaded guilty and testified for the government. They described during the four-week trial how they learnt the confidential information from insiders at Dell and Nvidia through a chain of friends and then ultimately passed it on" to the defendants, who were four or five levels away from the source of inside information.
If Martoma persists to the point of a jury trial, he will face off against the once respected 80-year-old doctor who fed him information, who most think will prove a decent witness. The government's record ought to be enough to make anyone think twice about going to trial, especially if there are witnesses willing to testify against them. The government can now boast victories in the form of a conviction or guilty plea in 71 of 72 cases in which they lodged charges. At this point, you have to wonder what it would take for Martoma to change his mind.
- here's the article from the Financial Times