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Monica Wolfe
Monica Wolfe
Articles (757) 

Level Global Agrees to Pay $21.5 Million in Illegal Trading Penalties

April 30, 2013 | About:

‘Tis the season of high-dollar settlements — well, for the US Securities and Exchange Commission that is. This week the managers of a now extinct Greenwich hedge fund agreed to pay over $21.5 million to the SEC in order to settle illegal insider trading charges brought against Level Global’s co-founder and a former analyst for the firm. The charges brought against the firm’s co-founder, Anthony Chiasson, and former analyst, Spyridan “Sam” Adondakis, came in January 2012, and accuse the two men of engaging in multiple instances of illegal insider trading of shares of Dell (DELL) and Nvidia (NVDA).

“The insider trading at Level Global was hardly an isolated event — it occurred repeatedly, and involved multiple companies and multiple quarterly announcements,” Sanjay Wadhwa, senior associate director of the SEC’s New York offices, said in a press release. “This settlement serves as another reminder that the SEC will hold hedge-fund managers accountable when their employees violate the securities laws.”

This isn’t the first case for Chiasson, who admitted guilt to a similar case involving hedge fund managers at Diamondback in December 2012.

The SEC reports that in 2008 and 2009, Adondakis forwarded confidential information about Dell and Dvidia’s revenue and profit margins to Chiasson before those reports went public.

Level Global has neither confirmed nor denied the SEC’s allegations, but agreeing to pay a $21.5 million fine is a pretty clear admittance of guilt.

Subject to court approval, the settlement with Level Global requires the company to pay $10.08 million in fees that it earned from the insider trading activity, pay prejudgment interest of $1.35 million, and then pay an additional penalty of $10.08 million. The firm also agreed to the entry of an order permanently enjoining the firm from future violations of sections of the SEC Act of 1934 and Securities Act of 1933.

This is the second largest insider trading settlement this year following SAC’s $616 million dollar scandal earlier this year.

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