A former Level Global Investors LP analyst testified that the fund’s co-founder, Anthony Chiasson, knew that he was sharing inside information with his friends, including two men who were analysts at SAC Capital Advisors LP.
Spyridon “Sam” Adondakis, 41, who worked as a technology analyst for Chiasson at the New York-based fund, told a jury in Manhattan federal court yesterday that Chiasson knew he was sharing illicit tips with a group of friends that included Jon Horvath, a former analyst at SAC’s Sigma Capital Management unit, and Ron Dennis, a former analyst with SAC’s CR Intrinsic unit.
Adondakis told the jury that he had passed nonpublic information about technology companies to Chiasson, allowing the fund to earn more than $63 million. Chiasson is on trial with Todd Newman, a former portfolio manager for Stamford, Connecticut-based Diamondback Capital Management LLC, accused of trading on inside information in Dell Inc. (DELL:US) and Nvidia Corp. (NVDA:US), based on tips provided to them by analysts who worked for them. Both men have pleaded not guilty.
Adondakis said he obtained and swapped illegal tips with a group of friends that included Horvath, Dennis and Jesse Tortora, a former analyst at Diamondback who worked for Newman.
Adondakis testified he had conversations with Chiasson in which he told him he was sharing nonpublic information with at least five others, including Dennis and Horvath. Adondakis said Chiasson knew that Horvath was passing the information to his fund manager, Michael Steinberg. Barry Berke, a lawyer for Steinberg, declined to comment on the claim.
“I told him Jon and I were friends and that he worked for Mike Steinberg,” Adondakis said during his testimony before U.S. District Judge Richard Sullivan.
“What if anything did you tell Mr. Chiasson about Ron Dennis?” Assistant U.S. Attorney John Zach asked.
“I mentioned that we had a friend at CR Intrinsic who we were sharing information with.”
Dennis hasn’t been accused of wrongdoing by the U.S.
Later, Zach asked Adondakis what Chiasson said about Steinberg.
“He mentioned that he did know Mike Steinberg because they’d worked together at SAC Capital,” Adondakis said.
Chiasson and portfolio manager David Ganek founded Level Global after leaving SAC.
Reid Weingarten, a lawyer for Chiasson, asked Adondakis if Chiasson knew that Horvath and Dennis were getting information about technology companies from him.
“I believe he knew we were all sharing information,” said Adondakis, who testified he worked for Chiasson from 2006 until May 2010. In October 2010, a month before agents with the Federal Bureau of Investigation executed raids at Level Global, Adondakis said FBI agents approached him and asked him to cooperate with the government. He testified he agreed to work with the U.S. soon after and pleaded guilty this year.
Horvath, who was arrested and charged in January with Chiasson and Newman, pleaded guilty to securities fraud on Sept. 28, admitting he passed nonpublic information to his portfolio manager. He is cooperating with the U.S.
At a hearing outside the jury’s presence earlier this month, Assistant U.S. Attorney Antonia Apps, who is a prosecutor on the case, described Steinberg as an “unindicted co- conspirator” of Newman and Chiasson’s scheme. Barry Berke, a lawyer for Steinberg, has declined to comment on the government’s assertion.
Steinberg was placed on leave by SAC in September, a person familiar with the matter said.
Jonathan Gasthalter, a spokesman for SAC, declined to comment on Dennis and Steinberg.
The case is U.S. v. Newman, 12-cr-00124, U.S. District Court, Southern District of New York (Manhattan).
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