Level Global Investors will pay $21.5 million to settle charges that a top official and several analysts engaged in repeated insider trading. The SEC announced the settlement with the Greenwich, Conn.-based hedge fund management firm Monday.
The settlement, which requires court approval, resolves civil charges filed by the Securities and Exchange Commission in January 2012 against Level Global co-founder and portfolio manager Anthony Chiasson, former analyst Spyridon “Sam” Adondakis, and six other defendants, along with the hedge fund management firm Diamondback Capital Management.
According to the 2012 complaint filed in federal court in Manhattan, Mr. Adondakis was part of a group of “closely associated hedge fund analysts who illegally obtained highly sensitive information regarding the financial performance of Dell and Nvidia before this information was made public.” Following the initial complaint, Level Global announced that it would close its business.
Without admitting or denying the allegations, Level Global agreed Monday to pay $10.1 million in fees earned from the alleged insider trading, plus a penalty of $10.1 million and prejudgment interest of $1.3 million.
Mr. Adondakis has admitted liability and reached a settlement with the SEC; he also pleaded guilty to parallel criminal charges. The SEC is continuing to pursue its insider-trading claims against Mr. Chiasson, who was convicted in December of securities fraud in a parallel criminal proceeding. Calls to his lawyer Michael Gilbert at Dechert in New York were not returned at press time.
Diamondback Capital Management paid $9 million to settle the charges against it and did not face related criminal charges.