Feb. 2 (Bloomberg) -- Former Primary Global Research LLC executive James Fleishman, sentenced to 2 1/2 years in prison for his role in an insider-trading scheme, is asking a federal appeals court in New York to allow him to remain free on appeal.
Fleishman was convicted in September of two separate conspiracy charges for what the U.S. said was a scheme to obtain and pass along confidential information from technology company employees who moonlighted as consultants for Mountain View, California-based Primary Global, a so-called expert-networking firm. The tips were given to fund managers who paid Primary Global for consultation calls, prosecutors said.
In December, U.S. District Judge Jed Rakoff in Manhattan denied Fleishman’s request to dismiss his conviction or grant him a new trial. Rakoff ordered Fleishman to surrender to U.S. Bureau of Prisons officials by Feb.7.
“Mr. Fleishman will present substantial questions on appeal, and therefore this court should order bail pending appeal,” his lawyer, Ethan Balogh, said in court papers filed Jan. 31 with the U.S. Court of Appeals in New York.
Balogh said prosecutors failed to establish that any acts committed to further the conspiracy occurred in New York. He also said Fleishman, of Santa Clara, California, was improperly barred from testifying in his own defense after he was directed to turn over his personal diaries to prosecutors.
“This appeal will present a novel question, and the government’s analysis reveals the weakness of its position,” Balogh said in court papers. He didn’t return a voice-mail message seeking comment on the filing.
At Fleishman’s December sentencing, Rakoff denied his bid to remain free during an appeal, said Assistant U.S. Attorney David Leibowitz.
Leibowitz said the U.S. presented evidence at trial that Mark Anthony Longoria, then an Advanced Micro Devices Inc. employee who also worked as a PGR consultant, disclosed nonpublic information on calls to Spyridon “Sam” Adondakis, an analyst with fund manager Level Global Investors LP. Adondakis was at his Manhattan offices when the call occurred, Leibowitz said.
Last month, federal prosecutors in New York charged seven men, including Adondakis and his boss, Level Global co-founder Anthony Chiasson, with being members of a “criminal club” of men who passed insider-trading tips and reaped almost $62 million.
Adondakis and two others have pleaded guilty and are cooperating with the U.S., prosecutors said. Chiasson’s lawyer, Greg Morvillo, has said his client will fight the charges.
The U.S. also argued Fleishman wasn’t wrongfully denied his right to testify at trial, saying, “If a defendant elects to testify, he will be subject to all cross-examination within the scope of his direct testimony and may not claim the protection of the Fifth Amendment.”
The case is U.S. v. Nguyen, 11-cr-32, U.S. District Court, Southern District of New York (Manhattan).
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