The government wrote that after Chiasson hired Spyridon “Sam” Adondakis to work as his analyst at Level Global, he received and traded on a constant flow of illegal tips on Dell Inc. and Nvidia Corp., earning at least $68 million.
Conspiracy, Fraud
Chiasson was convicted of one count of conspiracy and five counts of securities fraud in December. Level Global, based in Greenwich, Connecticut, agreed in April to pay more than $21 million to settle regulatory claims filed by the SEC.
Prosecutors said Chiasson and his co-defendant, former Diamondback Capital Management LLC fund manager Todd Newman, 48, were part of a group of portfolio managers, fund analysts and technology company insiders who shared material nonpublic information about the firms and then traded on them. Newman was convicted and sentenced this month to 4 1/2 years in prison.
Chiasson’s lawyers argued their client deserved a sentence comparable to others convicted of insider trading, such as former Goldman Sachs Group Inc. director Rajat Gupta, who was ordered to serve two years in prison, and former Primary Global Research LLC executive James Fleishman and Michael Kimelman, the co-founder of Incremental Capital LLC, who were both given 30- month prison terms.
‘Draconian’
Chiasson’s attorneys argued that the 10 to 13 years recommended by the guidelines is “Draconian,” Chiasson’s crimes were “aberrant” and he has led an “exemplary life.”
They estimated that Level Global earned only $11.7 million as a result of trading in the stocks of Round Rock, Texas-based Dell and Santa Clara, California-based Nvidia. They argued that federal sentencing guidelines wrongly allowed prosecutors to inflate profits generated as a result of alleged crimes.
“There is only one reason the range is so high: the guidelines’ unrelenting predisposition to punish profit,” Chiasson’s lawyers, Greg Morvillo and Reid Weingarten, said in a sentencing memo to the court.
Morvillo and Weingarten also argued Chiasson “should not be required to forfeit gains of any co-conspirators.”