A judge with a reputation for being tough on white-collar crime was assigned Tuesday to preside over a $78 million insider trading case that rivals the size of the biggest case of its kind ever brought in Manhattan.
U.S. District Judge Richard Sullivan took over the case after an indictment was returned against four financial industry professionals, including a hedge fund co-founder, Anthony Chiasson. Three others have already pleaded guilty to charges in the case and are cooperating.
Prosecutors alleged last month that the defendants got nearly $62 million in illegal profits based on trades of a single stock from 2008 through 2009. The Securities and Exchange Commission said that total, combined with other trades, rose to nearly $78 million.
That's about the same amount of money as the up to $75 million that prosecutors say was illegally earned by those involved in insider trading with former billionaire Raj Rajaratnam. Rajaratnam is serving an 11-year prison sentence after a jury convicted him last year. It is the longest sentence ever handed down in an insider trading case.
Chiasson, a co-founder at former hedge fund group Level Global Investors, was portrayed by prosecutors as the central figure in an insider trading ring. They said he accepted tips from a hedge fund analyst about announcements regarding Dell Inc.'s earnings, making about $57 million for his hedge fund.
Assistant U.S. Attorney David S. Leibowitz said at a bail hearing last month that Chiasson earned $53 million for his hedge fund in a single short sale, the largest illegal trade ever alleged in a federal criminal case in Manhattan.
Lawyers for Chiasson did not immediately respond to a request for comment Tuesday.