Bloomberg Anywhere Remote Login Bloomberg Terminal Demo Request


Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.


Financial Products

Enterprise Products


Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000


Industry Products

Media Services

Follow Us

Ex-Jefferies Paragon Manager Contorinis Conviction Upheld

A U.S. appeals court upheld the insider-trading conviction of Joseph Contorinis, a former Jefferies Paragon Fund money manager, and ordered a hearing into whether he must forfeit $12.6 million.

Contorinis, 48, was convicted in Manhattan federal court in 2010 and sentenced to six years in prison for participating in an illegal insider-trading scheme that prosecutors said earned him more than $7 million.

Jurors found that Contorinis traded on tips from Nicos Stephanou, who was an associate director of mergers and acquisitions at Zurich-based UBS AG. Stephanou, who was the government’s chief witness at the trial, testified that he passed inside information to Contorinis and others including an employee of a semiconductor company and two people in Cyprus.

While upholding the conviction, the 2nd U.S. Circuit Court of Appeals in Manhattan said the trial judge erred in ordering Contorinis to forfeit profits he didn’t earn or receive himself. The appeals court returned the case to the district judge for a new hearing on the forfeiture amount.

A trial judge may order a defendant to forfeit proceeds received by others, “provided the actions generating those proceeds were reasonably foreseeable to the defendant,” the appeals court said. “This view does not support an extension to a situation where the proceeds go directly to an innocent third party and are never possessed by the defendant.”

Forfeit Funds

U.S. District Judge Richard Sullivan, who presided over the trial, had held Contorinis liable for profits made by other “tippees.” Contorinis had argued he was an employee and small equity owner of his fund and shouldn’t be ordered to forfeit profits he never received.

“We hold that the district court erred in ordering appellant to forfeit funds that were never possessed or controlled by himself or others,” the appeals court said.

At the trial, Stephanou testified that he was part of a UBS team advising Cerberus Capital Management LP in its bid to buy Albertsons Inc. in 2006. He pleaded guilty and testified against Contorinis in exchange for leniency.

Roberto Finzi, a lawyer for Contorinis, didn’t immediately return a voice-mail message left at his office seeking comment on the ruling.

The cases are U.S. v. Contorinis, 09-cr-01083, U.S. District Court, Southern District of New York (Manhattan), and U.S. v. Joseph Contorinis, 11-cr-3, 2nd U.S. Circuit Court of Appeals (Manhattan).

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.