The United States Attorney for the Southern District of New York and the New York Office of the Federal Bureau of Investigation (FBI) announced that seven individuals who work in the investment industry have been charged with profiting from the illegal trades of two publicly traded technology companies; Dell, Inc. (Dell) and NVIDIA. The individuals exchange of insider information resulted in $61.8 million in illegal profits for three hedge funds and saved an investment firm $78,000 in losses.

Jesse Tortura, Sandeep Goyal, and Spyridan Adondakis pleaded guilty for their roles in the insider trading scheme. They each face a maximum sentence of twenty-five years in federal prison. The remaining four individuals charged include: Tom Newman, a former portfolio manager at a Connecticut-based hedge fund; Anthony Chiasson, a former portfolio manager and founder of a Manhattan hedge fund; Jon Horvath, a research analyst for a Connecticut-based hedge fund; and Danny Kuo, a research analyst and fund manager at an investment firm with offices in Nevada and California. Newman, Chiasson, Horvath, and Kuo are each charged with one count of conspiracy to commit securities fraud and one count of securities fraud. The conspiracy charge carries a maximum potential penalty of five years in prison and a fine of $250,000 or twice the gross gain or loss from the offense. The securities fraud charge carries a maximum potential penalty of twenty years in prison and a maximum fine of $5 million.

The arrests are part of the FBI’s “Operation Perfect Hedge,” which was formulated to dismantle rampant insider trading. Thus far, the operation has resulted in the arrest of more than sixty individuals.

The author of this blog is Erich Ferrari, an attorney specializing in Federal Criminal Defense matters. If you have any questions please contact him at 202-280-6370 or ferrari@ferrari-legal.com.

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