New Charges Filed in Hedge Fund Insider Trading Case

MANHATTAN (CN) - Hedge fund managers Anthony Chiasson and Todd Newman, and analyst Jon Horvath made millions trading on inside information about Dell and Nvidia, federal prosecutors claim in a revised indictment.

Prosecutors say Horvath and other analysts passed inside information to Chiasson, co-founder of Level Global Investors, and Newman, former portfolio manager for Diamondback Capital Management, who profited from trading on the tips in 2008 and 2009.

Level Global made $72.6 million on the insider trades, while Diamondback raked in nearly $3.9 million, according to the SEC, which filed a similar lawsuit in January.

Prosecutors charged the defendants and former Whittier Trust Co. analyst Danny Kuo with conspiracy and securities fraud in January. The superseding indictment filed Tuesday adds securities fraud charges based on the cooperation of Kuo and three other analysts.

Former analysts Kuo, Jesse Tortora of Diamondback, Sandeep "Sandy" Goyal of Neuberger Berman and Spyridon "Sam" Adondakis of Level Global pleaded guilty to insider trading and agreed to cooperate with the government.

According to the revised indictment in Federal Court, Goyal, a former Dell employee, passed earnings information from a Dell insider to Tortora, who gave the tips to Newman, Adondakis and Horvath.

Adondakis tipped off Chiasson, whose trades on the illegally obtained information made $57 million for Level Global, prosecutors say.

Diamondback made $3.8 million on the Dell information, for which it paid Goyal $175,000, according to the indictment. Newman allegedly approved those soft-money payments.

Prosecutors say the hedge fund managers and analysts had another inside source at Nvidia, the Pasadena-based graphics processor maker, who funneled information to Tortora, Adondakis and Horvath through Kuo.

Diamondback has since agreed to pay more than $9 million to settle insider trading charges from the SEC.

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