Diamondback

The 37-year-old Tortora, testifying for the third day in the case against SAC top money man Michael Steinberg, said his big year at now defunct hedge fund Diamondback was 2008, when his compensation hit $2.5 million. He only made $800,000 in 2009 and left the firm that was founded by former SAC portfolio managers early in 2010. Tortora, who is living with his parents in Florida while he awaits sentencing for his cooperation in the Steinberg trial, said he has only $100,000 left from his years of living high as a hedge-fund analyst. While the financial crash decimated portfolios of millions of Americans in 2008, that was Tortora’s big year, when insider trading tips about Dell, among others, paid off. Steinberg traded on that insider tip and knew it was illegal, prosecutors allege. Tortora said he lost $400,000 day trading and “several hundred thousands” in Las Vegas on blackjack and sports betting. He said he has also spent $400,000 on legal fees since his arrest on insider trading charges. While at Diamondback, he also fed insider tips to his stepfather, who did not know they were illegal. “In general, he’s done poorly,” Tortora told the jury. “He has lost a good amount of money.” [NYP]

Alternatively, if you made the mistake of approaching Todd Newman with information that was obtained through legitimate means, Jesse Tortora claims you’d be on the receiving end of a death stare the first time and a “What did I tell you about coming in here with a trade idea you ‘thoroughly researched’? Get the fuck out of my office and don’t ever waste my time with this garbage again,” on subsequent occasions. Read more »

  • 14 Nov 2012 at 6:30 PM

Accused Insider Traders Already Guilty Of One Thing

Being the sort of cheeseballs who call their adult “clique of friends ‘the Fight Club,’ named after the Brad Pitt movie.” [Bloomberg, earlier]

Diamondback Capital Has Some Exciting News To Share

Diamondback’s founders, Richard Schimel and Larry Sapanski, said Monday in a letter to clients that the investment firm’s external lawyers had conducted an “extensive review” of trading records and communications. As part of the review, lawyers with Wilmer Cutler Pickering Hale & Dorr LLP sifted through millions of emails and instant messages, analyzed thousands of trades, and made eight presentations to federal authorities regarding their findings between December 2010 and this month, according to a person familiar with the matter. The review “found no evidence establishing improper trading by any other Diamondback employee,” Mr. Schimel and Mr. Sapanski said in the letter, [announcing its $9 million settlement with the SEC]. [WSJ]

Remember, about a year ago, when hedge fund Level Global was rumored to have a government mole in its ranks? At the time, the firm’s representatives said such reports were total bull shit, and, investors were told, here’s how they knew that to be the case:

“As is the case each time there is a new development in the U.S. Attorney’s investigation, we have conducted an extensive internal factual correlation analysis, cross-referencing the facts in the complaints to our firm’s records. Our experienced outside legal counsel has also conducted its own analysis. Based on all of our work and analysis, we have concluded that these complaints do not appear to be referencing Level or Level personnel.”

Frankly, LG was getting a little tired of having to constantly run factual correlation analysis in order to prove the world wrong but c’est la vie. Anyway, despite usually having a 99.9% accuracy rate, the factual correlation calculator apparently missed one.

Last month, federal prosecutors in Manhattan said in a court filing in the case of a PGR employee that Level Global had made a $1.7 million profit by covering a short position it had in Taiwan Semiconductor Manufacturing Co. Ltd. in June 2009. That May and June, a Level Global technology analyst had about seven phone calls with Manosha Karunatilaka, a PGR expert who worked at TSMC and has pleaded guilty to supplying inside information to investment fund clients, prosecutors said. The Level Global technology analyst, Spyridon “Sam” Adondakis, was overseen by Mr. Chiasson and is cooperating with the government’s investigation, the Journal has previously reported, citing people familiar with the situation.

And now this is happening: Read more »

  • 15 Feb 2011 at 5:42 PM

Diamondback Investors Pull At Least $1 Billion

The $1 billion dollar figure was tallied up prior to today’s 5PM deadline to withdraw, so it may be higher. On the bright side, it could’ve been worse, but preventative measures- ‘around 29% of its $5.8 billion in capital is in multi-year lock-ups’- were in place. [WSJ]

  • 08 Feb 2011 at 5:09 PM

Diamondback Capital Investors Didn’t Sweat FBI Raid

Unlike certain other hedge fund investors (no names: FrontPoint) Diamondback clients have balls. Read more »