Breaking News

Vimpelcom Agrees to Sell 51% of Djezzy to Algeria for $2.64 Billion
Tweet TWEET

Ex-Diamondback Manager Gets Probation in Insider Case

Ex-Diamondback Capital Management LLC portfolio manager Anthony Scolaro was sentenced to three years of probation for participating in an insider-trading scheme with a former Galleon Group LLC fund manager.

Scolaro provided “substantial assistance” to the government in a probe of hedge-fund insider trading, including by making at least 43 calls that were monitored by the Federal Bureau of Investigation, Assistant U.S. Attorney Antonia Apps said today at a hearing in Manhattan federal court.

Scolaro pleaded guilty in November 2010 to securities fraud and conspiracy in connection with trading on confidential tips from Galleon fund manager Franz Tudor about TPG Capital’s 2008 acquisition of Axcan Pharma Inc. He began cooperating with the government shortly after he was approached by FBI agents.

“At the end of the day, this is a crime motivated by avarice and calculation,” U.S. District Judge William H. Pauley said. The judge ordered Scolaro to pay $275,890 in fines and forfeiture.

A Diamondback spokesman, Steve Bruce, said in a statement that the firm is “disappointed that Scolaro did not apologize to Diamondback’s investors, whose trust he abused in committing his crimes.”

Diamondback hasn’t been accused of any wrongdoing in the case.

At the hearing today, Apps said Scolaro’s recordings furthered many investigations, including a probe into hedge funds using expert-networking firms for insider trading.

Scolaro told the judge before his sentencing that he made “a terrible mistake in judgment.”

“I humbly apologize to God,” as well as his family and colleagues, he said. “This is not the example I hoped to set for my children.”

The case is U.S. v. Scolaro, 11-cr-429, U.S. District Court, Southern District of New York (Manhattan).

To contact the reporters on this story: Christie Smythe in New York at csmythe1@bloomberg.net; Patricia Hurtado in New York at pathurtado@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

Bloomberg reserves the right to edit or remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.