Business

Insider ‘tips’ chilled out angry boss

He had some “tips” for dealing with an abusive boss.

Ex-Diamondback Capital analyst Jesse Tortora testified that the only time he made his “moody” and “verbally abusive” boss happy was by leaking him illicit stock tips.

Tortora, 35, told a Manhattan federal-court jury yesterday that his former boss, Todd Newman, benefited from corporate secrets he gleaned from pals.

Newman, a former Diamondback money manager, and Anthony Chiasson, co-founder of hedge fund Level Global Investors, are accused of trading on illicit tips obtained by a “corrupt network” of research analysts. Prosecutors claim Newman, 48, and Chiasson, 39, netted more than $60 million in profits by trading illegally in shares of Dell and Nvidia.

Tortora said his already rocky relationship with his boss grew worse after a widespread crackdown on insider trading on Wall Street led to the arrest of Galleon Group co-founder Raj Rajaratnam in 2009. The arrests made it harder to get tips.

“Everybody was nervous. Everybody was anxious. People were a little bit reluctant to talk to each other,” he said.

With Wall Street trembling in fear, Tortora said he turned to legitimate research, including analysis of publicly available data — but Newman wasn’t impressed.

“I got little or no response,” he said of his clean reports. “It was in stark contrast to when I would call him up” with inside tips, he said.

Tortora, who took the stand yesterday in his second full day of testimony, said Newman phoned him several times after Rajaratnam’s arrest.

He said his ex-boss was worried that Dell had been referenced in the complaint, as well as Loch Capital Management — a Boston hedge fund that was later raided by the FBI along with Diamondback and Level Global in 2010. Newman was close to executives at Loch.

Tortora said he quit Diamondback in May 2010 following a shouting match with Newman, who he described as “verbally abusive.” I never knew who he was going to be when I talked to him,” he told the jury.

Lawyers for Newman and Chiasson argue their clients were too far removed to know the stock tips were tainted.

Newman’s lawyer, Stephen Fishbein, during cross-examination, accused Tortora yesterday of trying to “scapegoat” his former boss.

He also pressed Tortora on the fact that he didn’t know who the source of his insider tips at Dell was, thus raising doubt as to whether Newman knew it was confidential info.

“You didn’t even know if the person worked at Dell. Is that correct?” Fishbein said.

“I did know the person worked there,” Tortora said.