Ex-Dell Employee Aided Federal Insider Probe, U.S. SaysPatricia Hurtado
Former Dell Inc. supply manager Daniel DeVore deserves leniency for helping prosecutors in federal insider-trading probes that included SAC Capital Advisors LP fund manager Michael Steinberg, the U.S. said.
Thanks to DeVore’s cooperation, the Federal Bureau of Investigation executed search warrants on several hedge funds in November 2010, the U.S. said. Some of the nonpublic information DeVore leaked to hedge fund analysts reached Steinberg and two other portfolio managers, Assistant U.S. Attorney Antonia Apps said in papers filed today in Manhattan.
DeVore, who is scheduled to be sentenced tomorrow by U.S. District Court Judge Jed Rakoff, faces as long as 25 years in prison.
DeVore deserves probation, Johnny Sutton, his lawyer, wrote in a Nov. 26 sentencing memo to Rakoff.
“Daniel DeVore is a good man who violated the law but took responsibility for his actions from the outset,” Sutton wrote. “DeVore has accepted responsibility for his actions and has been humbled by these proceedings.”
DeVore was scheduled to testify at Steinberg’s insider-trading trial, which is under way in Manhattan federal court. Apps, one of the prosecutors on Steinberg’s case, said it’s unlikely DeVore will be a witness.
“DeVore has provided information that has been helpful to various investigations by the U.S. Attorney’s Office and the Securities and Exchange Commission,” Apps said in the court papers. “DeVore has provided incriminating information against a number of hedge fund professionals who received DeVore’s inside information while he was acting as a consultant.”
The names of those professionals were redacted in the court papers. They haven’t yet been charged, Apps said.
DeVore pleaded guilty in December 2010, admitting he had passed inside information to hedge-fund managers and employees while working as a paid consultant at Primary Global Research LLC. PGR, which was based in Mountain View, California, was an expert-networking firm that put investors in touch with employees at public companies.
The U.S. said some PGR consultants leaked nonpublic information to fund managers and analysts for a fee. At least four PGR employees or consultants have been convicted of insider trading.
Apps said DeVore also deserves leniency because of his “substantial contribution” to the government’s case against former PGR sales executive James Fleishman. She said he provided direct evidence that Fleishman knew PGR consultants provided confidential information to clients.
Fleishman was convicted of insider trading by a Manhattan federal jury in 2011.
Prosecutors said DeVore provided the government information that he had regular telephone calls from 2008 to 2009 with Jesse Tortora, a former Diamondback Capital Management LLC analyst, and Spyridon “Sam” Adondakis, a Level Global Investors LP analyst, during which he disclosed nonpublic information.
Both analysts provided information against their bosses, former Todd Newman, a former Diamondback fund manager and Anthony Chiasson, the co-founder of Level Global, prosecutors said. Information obtained in the FBI raids helped the government build cases against both both portfolio managers, who were convicted of insider trading after trial last year.
The U.S. says Steinberg made more than $1.4 million based on inside information fed to him by his analyst.
The case is U.S. v. Nguyen, 11-cr-32, U.S. District Court, Southern District of New York (Manhattan).