Lawyers for former Diamondback Capital Management LLC portfolio manager Todd Newman said their client should be tried separately from Level Global Investors LP co-founder Anthony Chiasson because of e-mails Chiasson seeks to introduce at trial.
Newman was among the recipients of hundreds of e-mails that Chiasson wants to show to jurors, which would be “highly prejudicial,” Stephen Fishbein and John Nathanson, Newman’s lawyers, said today in papers filed in U.S. District Court in Manhattan.
Newman and Chiasson are scheduled to go on trial Oct. 29 before U.S. District Judge Richard Sullivan, charged with being part of what Manhattan U.S. Attorney Preet Bharara called a “criminal club” of friends and associates who traded on illegal tips. The men allegedly reaped almost $62 million from insider trading in Dell Inc. and Nvidia Corp.
Eight people have been charged in the case and six have pleaded guilty to insider-trading charges. Jon Horvath, a former technology analyst at a unit of Steven Cohen’s $14 billion hedge fund SAC Capital Advisors LP, who was charged with the two men, pleaded guilty on Sept. 28 to passing nonpublic information to his portfolio manager and is cooperating with the U.S.
Chiasson seeks to introduce as part of his defense several hundred e-mails, including some from former Diamondback analyst Jesse Tortora, who has pleaded guilty and also is cooperating, to Newman about “company specific information,” Newman’s lawyers said. Chiasson’s name doesn’t appear on most of the e-mails, they said.
“In other words, Mr. Chiasson is proposing to put in evidence a very large number of communications about various stocks and sources of information that the government itself will not address in its case,” Fishbein and Nathanson said.
If the judge doesn’t grant a separate trial, Newman’s lawyers ask that Chiasson be barred from entering the e-mails as evidence.
Prosecutors said in court after Chiasson’s arrest on Jan. 18 that he used illegal tips to win a $53 million bet on Dell trades for his Level Global fund.
Greg Morvillo, a lawyer for Chiasson, didn’t immediately return an e-mail sent after business hours seeking comment on Newman’s request.
The case is U.S. v. Newman, 12-00124, U.S. District Court, Southern District of New York (Manhattan).