Todd Newman, Insider Trading, New York 2013

Todd Newman, Insider Trading, New York 2013

Todd Newman, a former portfolio manager at Diamondback Capital Management, LLC, has been sentenced to 54 months in prison for his involvement in a multi-million dollar insider trading scheme in New York.

Newman, 48, of Needham, Massachusetts, was convicted of one count of conspiracy to commit securities fraud, and four counts of securities fraud, following a six-week jury trial in December 2012.

According to the Superseding Indictment, Newman was part of a criminal club of portfolio managers and analysts who obtained material nonpublic information, or inside information, directly and indirectly, from employees who worked at public companies.

Newman's research analyst, Jesse Tortora, together with research analysts at other investment firms, shared inside information with each other, which they then provided to their portfolio managers.

In 2008 and 2009, Newman received inside information from Tortora related to Dell's quarterly earnings, which Tortora had received from Sandy Goyal, an analyst who worked at another firm.

Newman traded on the Dell inside information in advance of the May 2008 and August 2008 quarterly earnings announcements, and earned nearly $4 million in illegal profits for his firm.

Newman was also ordered to forfeit $737,724 and to pay a $1 million fine. He will serve one year of supervised release after completing his prison term.

U.S. District Judge Richard J. Sullivan sentenced Newman to 54 months in prison, stating, 'With today's sentence, Todd Newman becomes the first member of this corrupt circle of friends to be punished for his conduct.'

Manhattan U.S. Attorney Preet Bharara said, 'Efforts to cheat the market by gaining an illegal edge ultimately lead to a loss of one's liberty, as it did for Todd Newman today.'

Newman's sentence is a result of his involvement in the insider trading scheme, which also involved his co-defendant, Anthony Chiasson, and other analysts and portfolio managers.

Source: https://www.justice.gov/usao-sdny/pr/former-hedge-fund-manager-todd-newman-sentenced-manhattan-federal-court-54-months