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The Blotter Report: Devious Doings

Wall Street’s Very Own Bling Ring?

A New York federal judge on Thursday handed a former portfolio manager at Diamondback Capital Management a four and a half year prison sentence, the latest bad news for group of financial services professionals.

According to prosecutors and regulators, a “criminal club” comprised of portfolio managers and analysts from Diamondback and hedge fund advisory firm Level Global Investors hatched a multi-million insider-trading scheme involving Dell and Nvidia securities.

Specifically, Newman and other analysts allegedly obtained confidential information, which they then shared with each other and the portfolio managers.

Meanwhile, Level Global on Monday agreed to pay $21.5 million to settle SEC charges that its co-founder Anthony Chiasson repeatedly participated in the insider-trading scheme.

Diamondback’s former analyst Spyridon "Sam" Adondakis allegedly passed the information on Dell and Nvidia's revenues, profit margins and quarterly results to Chiasson, who used it to execute trades in hedge funds managed by Level Global.

The Greenwich, Conn.-based hedge fund advisory firm is currently in the process of winding down its business following the announcement of the investigation in 2011.


Smooth Criminal

A Massachusetts investment advisor is facing 17 years in prison for allegedly running a Ponzi scheme through his security company, while simultaneously bilking rare coin collectors out of over $7 million.

In a case U.S. Attorney Carmen M. Ortiz called “one of the most serious white collar cases in Massachusetts in recent memory,” Arnett L. Waters used his connections to sell the coins at inflated prices, as well as sold sham investment partnerships.

Waters ran a scheme in which he allegedly convinced customers to purchase coins at a 600% mark-up from market value, as well as charged storage and maintenance fees on coins he had already sold out from under the owners.

Last week, a federal judge sentenced the former broker and investment advisor to a 17-year prison term, as well as ordered him to pay over $9 million in restitution and forfeiture.


Cricket Player in a “Sticky Wicket” Over Advisor Negligence

Overseas, former England cricket player Paul Collingwood is suing his Sigma Wealth Management advisor, according to the Sunday Times. In a High Court writ, the cricket champion and his wife claim Roderick Langham’s negligence and bad advice resulted in a £300,000 ($466,000) loss.

Langham allegedly placed more than £400,000 ($621,000) into high risk and unregulated collective investments, even though Collingwood claims he told the advisor the couple didn’t want to risk losing any of the capital.

The cricket star and his wife are seeking to recover their funds from Sigma, which is currently undergoing liquidation. 

TAGS: Industry Blogs
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