January 18 2012
Largest Insider Trading Scheme Involving Single Stock Charged to Date
Three Defendants Have Pled Guilty and Are Cooperating with the Government’s Investigation
Preet Bharara, the United States Attorney for the Southern District of New York, and Janice K. Fedarcyk, the Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), today announced charges against seven investment professionals, who worked at three different hedge funds and two other investment firms, for engaging in a scheme in which they provided each other with material, non-public information (“Inside Information”) about two publicly traded technology companies, Dell, Inc. (“Dell”) and NVIDIA (“NVDA”).
Using the Dell Inside Information, the three hedge funds netted more than $61.8 million in illegal profits and one of the investment firms avoided $78,000 in losses. Charged in a Complaint unsealed today are: TODD NEWMAN, a former portfolio manager at a Connecticut-based hedge fund (“Hedge Fund A”); ANTHONY CHIASSON, a former portfolio manager and a co-founder of a Manhattan-based hedge fund (“Hedge Fund B”); JON HORVATH, a research analyst who worked in the New York office of a Connecticut-based hedge fund (“Hedge Fund C”); and DANNY KUO, a research analyst and fund manager at an investment firm with offices in California and Nevada (“Investment Firm D”). This morning, NEWMAN, HORVATH, and KUO were arrested, and CHIASSON surrendered to federal authorities. Later today, CHIASSON and HORVATH are expected to be presented in Manhattan federal court, NEWMAN is expected to be presented in Massachusetts federal court, and KUO is expected to be presented in federal court in the Central District of California.
Also unsealed today were the guilty pleas of: JESSE TORTORA, a former research analyst at Hedge Fund A; SPYRIDON “Sam” ADONDAKIS, a research analyst at Hedge Fund B; and SANDEEP “Sandy” GOYAL, a research analyst who worked at the Manhattan office of a global asset management firm (“Investment Firm 1”). They pled guilty to their roles in the insider trading scheme and are cooperating with the Government’s investigation.