The beat goes on for Manhattan US Attorney Preet Bharara.
The federal crime-fighter improved his perfect record to 71-0 in the massive insider trading probe of hedge funds yesterday after a jury found Anthony Chiasson and Todd Newman guilty of conspiracy and securities fraud.
The two face 20 years in prison when sentenced April 19.
Bharara’s prosecutorial streamroller has to be on the mind of Mathew Martoma, a former portfolio manager at a unit of Steve Cohen’s SAC Capital Advisors, who became the latest defendant in the three-year probe when he was arrested on Nov. 20.
The Martoma indictment references Cohen, and prosecutors have been trying to flip Martoma to testify against his former boss.
While Martoma has so far refused to cooperate, perhaps this latest action by a Manhattan jury will convince him otherwise.
As for Chiasson, his conviction brings to five the number of former SAC employees who have been found guilty of insider trading while working at the firm.
Chiasson, 39, the co-founder of the now-defunct Level Global Investors, and Newman, 47, a former portfolio manager at Diamondback Capital Management (also shuttering), both denied pocketing more than $70 million in profits on trades of Dell and Nvidia with the help of illegal insider tips.
After a four-week trial and three days of deliberation, the 12-person jury rejected their case — and agreed with prosecutors that the two were part of a “corrupt chain” of insider-trading hedgies.
“With today’s guilty verdicts, Todd Newman and Anthony Chiasson join the ranks of high-level investment fund managers who are being made to answer for their extraordinarily bad risk-reward analysis about what is right and what is wrong,” Bharara said in a statement.
“Like scores of privileged professionals before them, Newman and Chiasson are finding out the hard way that the opportunity cost of gaining an illegal edge in the market is the loss of one’s liberty,” Bharara continued.
The case against them hinged on the cooperating testimony of former analysts Sam Adondakis, who worked for Chiasson at Level Global, and Jesse Tortora, whose boss at Diamondback was Newman — and not on wiretapped conversations, which sank Galleon Group founder Raj Rajaratnam in May 2011.
The two, who testified against their former bosses as part of guilty pleas, were part of what the government called a “circle of friends” who exchanged non-public information about technology companies.
Six others of the group have pled guilty, including another former SAC employee, Jon Horvath.