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US v Newman Opposition to Severance

US v Newman Opposition to Severance

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Published by: DealBook on Oct 22, 2012
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12/02/2012

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 UNITED STATES DISTRICT COURTSOUTHERN DISTRICT OF NEW YORK------------------------------------------------------x:UNITED STATES OF AMERICA ::v. :: Case No. 12 Cr. 121 (RJS)TODD NEWMAN and :ANTHONY CHIASSON, ::Defendants. :------------------------------------------------------x
DEFENDANT ANTHONY CHIASSON’S RESPONSE TO DEFENDANT TODDNEWMAN’S RENEWED MOTION FOR SEVERANCE
STEPTOE & JOHNSON LLP1114 Avenue of the AmericasNew York, New York 10036(212) 506-3900MORVILLO LLPOne World Financial Center200 Liberty Street, 27th FloorNew York, NY 10017(212) 379-2081
 Attorneys for Anthony Chiasson
Case 1:12-cr-00121-RJS Document 148 Filed 10/12/12 Page 1 of 6
 
 In Defendant Todd Newman’s Renewed Motion for Severance (ECF #146) (“NewmanMem.”), Mr. Newman seeks severance, or, in the alternative, the exclusion of a large number of e-mails that Defendant Anthony Chiasson intends to introduce in his defense. DefendantChiasson respectfully opposes the exclusion of this important evidence for his defense.
BACKGROUND
The e-mails in question are e-mails among analysts who the government alleges formedan insider trading conspiracy, that were sent to and/or from cooperating witness Sam Adondakis(the “Adondakis E-mails”). The government charges that Mr. Chiasson was part of the allegedconspiracy, and that Mr. Adondakis was the sole alleged conduit by which Mr. Chiassonallegedly received information from company insiders. Mr. Chiasson intends to introduce, in hisdefense, e-mails showing the many circumstances in which Mr. Adondakis did
not 
shareallegedly improper information with Mr. Chiasson, to rebut the government’s allegation thatMr. Adondakis and Mr. Chiasson were co-conspirators, and to show that in fact Mr. Adondakis,while passing on stock trading information,
hid 
from Mr. Chiasson that such information camefrom inside sources who allegedly breached their duties by disclosing such information.Mr. Chiasson respectfully submits he should not be restricted from introducing this evidence inhis defense.A.
 
Mr. Chiasson Intends to Use the Adondakis E-Mails Throughout HisDefense.
Mr. Newman’s brief suggests that “Mr. Chiasson intends to offer these exhibits
en masse
,through a summary witness, to support a statistical analysis showing how rarely Mr. Adondakisprovided Mr. Chiasson with information,” and that for the vast bulk of the e-mails, there will beno witness with knowledge called who can testify about the e-mail. Newman Mem. at 3. Thus,Mr. Newman proposes that Mr. Chiasson be restricted to offering the statistical analysis through
Case 1:12-cr-00121-RJS Document 148 Filed 10/12/12 Page 2 of 6
 
- 2 -a summary witness without admitting the Adondakis E-mails themselves.
 Id.
at 4-5. On thecontrary, Mr. Chiasson intends to use the Adondakis E-mails throughout his defense, and shouldnot be restricted in doing so (other than through the ordinary operation of the rules of evidence).For Mr. Chiasson, this case is about a simple issue: what Sam Adondakis told him, andwhat Sam Adondakis did
not 
tell him. Mr. Adondakis is the only person alleged ever to havepassed any inside information to Mr. Chiasson. Mr. Adondakis, of course, was a stock analystwhose
 job
was to root out and pass on to Mr. Chiasson information relevant to stocks in whichLevel Global traded or might want to trade. Mr. Chiasson, in his defense, intends to prove thatMr. Adondakis withheld Adondakis E-mails from Mr. Chiasson and also did
not 
pass on toMr. Chiasson critical information that marks the difference between legitimate, competitivetrading and illegal insider trading—namely, information about stocks identified as coming fromcompany insiders who revealed that information for personal benefit in violation of theirfiduciary duties.
1
This proof is at the core of Mr. Chiasson’s defense.The government has charged that Mr. Adondakis and Mr. Chiasson were co-conspirators,and intends to put on a wealth of information concerning their relationship spanningapproximately three years at Level Global. To rebut the government’s charge that Mr. Chiassonwas involved in an illegal conspiracy, Mr. Chiasson intends to offer proof spanning the sametime and relationship, showing the many circumstances and instances in which Mr. Adondakisconcealed critical information from Mr. Chiasson. This proof is inconsistent with any
1
 
See, e.g.
,
 Dirks v. SEC 
, 463 U.S. 646, 660 (1983) (a tippee may be liable “only when theinsider has breached his fiduciary duty to the shareholders by disclosing the information to thetippee and the tippee knows or should know that there has been a breach”);
id.
at 662 (“Absentsome personal gain [to the inside tipper], there has been no breach of duty to the stockholders.And absent a breach by the insider, there is no derivative breach.”);
United States v. Chestman
,947 F.2d 551, 571 (2d Cir. 1991) (en banc) (no liability, even where tippee knew informationwas material and nonpublic, where tipper had not breached any fiduciary duty).
Case 1:12-cr-00121-RJS Document 148 Filed 10/12/12 Page 3 of 6

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