(May 1, 2013) - The Level Global Investors co-founder convicted of insider trading has asked the sentencing judge for leniency, arguing that he made far less on the Dell tip than the government said he did.
Anthony Chiasson is due to be sentenced in about two weeks.
A jury found him guilty on December 17, 2012, of fraud and conspiracy related to trades of Dell stock. Former Diamondback Capital portfolio manager Todd Newman was also convicted in the suit.
Many of the records for this case remain under seal, including the original complaint. However, according to the recently unsealed indictment, technology analysts passed Chiasson private information regarding Dell's earnings in advance of its May 29, 2008, announcement. Chiasson traded for Level Global based on these tips.
The hedge fund earned approximately $11.7 million on these trades, according to both the government prosecution and Chiasson's defense.
Based on the court's calculations of Chiasson's illegal gains at nearly $12 million, the judge will use 10 to 13 years as a guideline sentence, according to official documents.
However, Chiasson's attorneys have argued that because he was trading on behalf of the firm, not his personal portfolio, the hedge fund manager's own profits were in fact $478,700. His lawyers have "respectfully submitted" their own guideline to the judge, based on former trader Michael Kimelman's sentence in a similar case: 30 months, or 2.5 years.
But monetary gains are not the thrust of Chiasson's argument for leniency. The 80-page memo submitted to Judge Richard Sullivan yesterday opens with the sentence, "Anthony Chiasson is an extraordinary man."
The memo goes on to detail the former managing director's Jesuit upbringing, charity work, community donations, scholarship fund, and history as a job creator. "All of this, of course," the defense stated, is "secondary to what Mr. Chiasson considers his greatest accomplishment-his family."
At the time of Chiasson's guilty verdict, US district attorney for Manhattan Preet Bharara said the case should serve as a warning to other top financiers.
"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.
"Every member of this close-knit criminal club now stands convicted. 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."
The case is United States of America v. Todd Newman and Anthony Chiasson, 1:12-cr-00121-RJS, US District Court, Southern District of New York.