SEC v. Adondakis et al., Case No. 12 Civ. 0409 HB (S.D.N.Y). On April 30, 2013, the SEC announced it settled insider trading charges against Level Global Investors LP. In January 2012, the SEC filed insider trading charges against Level Global, the firm’s co-founder Anthony Chiasson, analyst Spyridon “Sam” Adondakis, and six other defendants, including five investment professionals and the hedge fund advisory firm Diamondback Capital Management. The SEC alleged that Adondakis was part of a group of hedge fund analysts who obtained confidential information about Dell and Nvidia before this information was made public. Adondakis tipped Chiasson, who then traded for hedge funds managed by Level Global and made millions of dollars. Level Global ceased operations and began returning money to investors after the insider trading investigation was announced. Without admitting or denying the SEC’s allegations, Level Global consented to entry of a final judgment ordering it to disgorge $10,082,725 in fees received as a result of the insider trading, to pay prejudgment interest of $1,348,824, and to pay a civil monetary penalty of $10,082,725. Level Global has also agreed to a permanent injunction against future violations of Section 10(b) of the Exchange Act, Exchange Act Rule 10b-5, and Section 17(a) of the Securities Act. Adondakis previously pleaded guilty to criminal charges and agreed to a settlement with the SEC in which he admitted liability for insider trading. The SEC’s case against Chiasson continues. Chiasson was convicted of securities fraud in a parallel criminal proceeding.
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