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(Updates with judge’s ruling in second paragraph.)
Feb. 6 (Bloomberg) -- Joseph Contorinis, an ex-Jefferies Paragon Fund money manager, must pay $8.3 million in a U.S. Securities and Exchange Commission insider-trading suit, a judge ruled.
U.S. District Judge Richard J. Sullivan in New York granted the SEC summary judgment, or a ruling before trial, in a Feb. 3 order, citing the facts proved at an earlier criminal trial.
Contorinis was accused of illegally trading on inside tips about bids for Albertsons Inc. supplied by Nicos Stephanou, an investment banker who was the government’s chief witness in the trial. Contorinis was convicted of securities fraud and conspiracy in a scheme that federal authorities said netted more than $7 million in illegal profits. He is serving a six-year prison term.
Sullivan, who also presided at the criminal trial, rejected the defense argument that Contorinis shouldn’t have to disgorge funds that he “never received or enjoyed” and that he personally profited by “a small percentage” of the illegal gains.
“Defendant is fully capable for his crimes, from which he profited substantially,” Sullivan wrote in his order.
“The jury’s verdict reflects defendant’s trades in ABS occurred over a period of two months, revealing a high degree of intent and a willingness to repeatedly exploit misappropriated information,” Sullivan wrote, referring to Albertsons by its ticker symbol.
Stephanou, a longtime friend of the defendant employed as an investment banker at UBS AG, testified he passed him nonpublic information regarding efforts by Cerberus Capital Management LP, to acquire Albertsons, which was then the second- biggest U.S. grocer.
The SEC case is Securities and Exchange Commission v. Stephanou, 1:09-cv-011042, and the criminal case is U.S. v. Contorinis, 09-cr-01083, U.S. District Court, Southern District of New York (Manhattan).
--Editors: Charles Carter, Andrew Dunn
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