* Government: Firm made over $68 million of illegal profits
* Judge balances Chiasson's community work with crime
By Bernard Vaughan
NEW YORK, May 13 Former Level Global Investors
LP fund manager Anthony Chiasson on Monday was sentenced to
6-1/2 years in prison for insider trading, a penalty that the
judge in the case said was intended to deter others in the
financial industry from similar conduct.
U.S. District Judge Richard Sullivan also ordered the former
hedge fund manager to pay a $5 million fine.
Sullivan said that Chiasson, who is married with two young
children, was "a good man, a decent man," but he cited
deterrence as a reason to send him to prison.
"This is conduct that has to be punished," Sullivan said.
Chiasson did not make any statements to the judge during the
proceedings and chewed gum throughout. While the judge said
Chiasson, 39, carried himself with dignity throughout the trial
and sentencing, he expressed annoyance over Chiasson's gum
chewing in the courtroom.
Chiasson's lawyer, Gregory Morvillo, said he intends to
appeal the conviction. Sullivan denied bail pending appeal and
ordered Chiasson to surrender in 90 days.
Chiasson and Todd Newman, a former portfolio manager with
the now-defunct hedge fund Diamondback Capital Management, were
convicted in December of conspiracy to commit securities fraud
and securities fraud.
The two used inside information to trade in shares of
computer maker Dell Inc and chipmaker Nvidia Corp
. Level Global made more than $68 million in illegal
profits from the trades, according to prosecutors.
Sullivan sentenced Newman to 4-1/2 years in prison earlier
this month. Federal prosecutors had requested that Chiasson
serve as many as 10 years in prison.
Level Global closed in 2011 following an FBI raid and has
been winding down its operations. Last month, the firm agreed to
pay $21.5 million to settle civil charges brought by the U.S.
Securities and Exchange Commission related to Chiasson's
Chiasson and David Ganek launched Level Global in 2003 after
leaving Steven A. Cohen's $15 billion hedge fund, SAC Capital
Advisors. Ganek has not been charged with wrongdoing.
Nine current or former SAC Capital employees have been
charged or implicated in the government's investigation of
insider trading, though neither the firm nor Cohen has faced
criminal charges. In April, SAC Capital agreed to pay $616
million to settle an SEC civil complaint.
Chiasson is the 49th person to be sentenced since August
2009 in the government's sweeping insider-trading investigation.
A total of 73 people have been convicted, according to the
Manhattan U.S. Attorney's Office.
Morvillo pointed to Chiasson's charitable works in
requesting leniency. Chiasson started a scholarship fund for
financially disadvantaged students in his home state of Maine,
served on the board of trustees for his high school and college,
and donated millions to charities, according to his sentencing
Sullivan reserved judgment on how much he will order
Chiasson to forfeit, though he said it would not be more than $2
The case is U.S. v. Chiasson, U.S. District Court, Southern
District of New York, No. 12-cr-00121.