Investigators are poised to enter new charges against three traders reports the Wall Street Journal. Each of these men work at big-name firms – Neuberger Berman Group LLC, Diamondback Capital Management LLC and Level Global Investors LP.
Possible Charges Against Adondakis, Tortora and Abbasi
“The expected charges come at a time when two former research analysts at Level Global and Diamondback—Spyridon “Sam” Adondakis and Jesse Tortora, respectively—have been cooperating with the federal investigation,” writes the Wall Street Journal. “Both left their firms early last year.” The Journal reports that Sam Adondakis was terminated by Level Global in May 2010. Allegedly, Adonakis and Tortora, who had worked together early in their careers, “shared stock tips with one another—and with friends at different investment firms—and socialized together after going to Diamondback and Level Global, others familiar with the case say.” Investigators are also reportedly pursuing charges against analyst Fayad Abbasi of Neuberger Berman.
Insider Trading Probe Widens
The charges would also “represent a significant broadening of an insider-trading investigation of employees at public companies passing along confidential information. Hundreds of conversations have been monitored on U.S. wiretaps in the probe.” The federal investigation on insider trading in the financial industry began four years ago, with charges having been issued in waves over the last year. The charges, if brought, will represent the latest in the industry-wide probe – the same investigation that brought to light the misconduct of Raj Rajaratnam, the convicted founder of the hedge fund Galleon Group. Steve Cohen’s SAC Capital, although never charged, has been one of the more closely scrutinized hedge funds (read about it here).