Lady Who Traded On Inside Information Obtained From AshleyMadison.Com Paramours Will Not Do Time

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Remember Donna Murdoch? Her story is a bit complicated but essentially: Murdoch and her husband were hard up for some money (they owed $1.45 million on a subprime home mortgage, natch). She decided the best way to tackle the debt was to make some money trading on material non-public information. Getting the tips was easy enough– Murdoch got on AshleyMadison.com where she met an Ernst and Young partner named James Gansman who advised companies doing mergers and was more than happy to give them to her. Only problem was, Big D didn’t have the cash to trade on Gansman’s inside info, so she hopped back on to the adultery site and found another guy who could front the money. That guy was 71 year-old Richard Hansen, who gave her a job at Keystone Equities Group (where he was chairman), plus some of his penis on the side.

Both Murdoch and Hansen traded on Gansman’s tips (neither guy knew about the other, by the by) and while all three faced years in prison, only the men are doing time, on account of Murdoch screwing them yet again.

Under sentencing guidelines, Murdoch had faced nearly four years behind bars for 17 counts of securities fraud, making false statements and obstruction of justice. Murdoch was busted in 2008 after regulators noticed suspicious trading activity involving mergers and acquisitions, through which she netted about $392,000. She initially lied to the feds but later decided to come clean and became what prosecutors called a "model cooperating witness," testifying for four grueling days against ex-lover James Gansman, with whom she carried on a lengthy affair after they met on ashleymadison.com.

Murdoch, 49, buried her face in her hands and began blubbering after the judge said she wouldn't be heading off to the pokey.
"Your honor, I will carry the shame of all my wrongdoing for the rest of my life," the heavyset blonde said as her forgiving hubby and three kids watched from the gallery in Manhattan federal court.

After the judge sentenced Murdoch to two years probation she told the insider trader to get her life back on track stat and consider more legal ways to pay back debts, considering her prior modus operandi will probably not work much longer as Murdoch is "no youngster."

Bed-Hopping Insider Trader Spared Prison [NYP]

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Members Of Insider Trading "Club" Were Good At Obtaining Material Non-Public Information, Not So Good At Playing It Cool On Conversations Recorded By The Feds

Later this week, Anthony Chiasson, a Level Global co-founder, and Todd Newman, a former Diamondback portfolio manager, will go to trial in Federal Court for allegedly making $67 million in ill-gotten gains, based on inside information they obtained about Nvidia Corp and Dell Inc. According to U.S. Attorney Preet Bharara, Chiasson and Newman, who've both pleaded not guilty, were able to rack up all their profits by teaming up with a bunch of friends and forming an insider trading club, which is a lot like a book club or fight club in that they took roll, traded canapé duties, and drank Pinot Grigio, but different in that instead of discussing The Art Of Fielding or punching each other in the face, they spent every Monday night from 7 to 9 sharing material non-public information with each other. “This case describes a tight-knit circle of greed on the part of professionals willing to traffic in confidential information,” Bharara said when the charges were announced in January. “It was a circle of friends who essentially formed a criminal club, whose purpose was profit and whose members regularly bartered inside information.” In the beginning, when the club was first formed, there was a spirit of camaraderie, as the club members happily traded tips for everyone's mutual benefit. Unfortunately, things started to break down when some people agreed to cooperate with the government by recording their friends admitting wrongdoing, in exchange for leniency. Former Diamondback analyst Jesse Tortora, for instance, gave fellow club member Danny Kuo a call at the direction of the FBI on December 1, 2010, a conversation that Chiasson and Newman's lawyers are trying to use as evidence that Tortora, who will be testifying against them, lacks credibility, based on the fact that when asked by Kuo if his phone was being tapped, Tortora didn't say "Yup! Helping the Feds build a case against you, actually." “What’s happening, man?” Tortora asked during the call, according to a transcript prosecutors submitted to the court. “Dude, is your phone tapped?” Kuo replied. “Wait, is the phone tapped?” Tortora asked, adding, “Why do you ask that?” Despite losing major points for repeating the question-- you never repeat the question!-- and the extremely unconvincing "Oh, why do you ask" attempt to act natural and not like he was working for the government, Tortora ultimately recovered. After Kuo and Tortora discussed defense strategy to explain their trades were made after legitimate research, Kuo concluded the call with a final warning to Tortora about making future calls from a personal telephone, according to the transcript. “I would seriously invest in some quarters, and start calling from 7-Elevens,” Kuo said. Hedge Fund Founder Faces Jury as FBI Raids Yield Trial [Bloomberg]

Women Who Insider Traded On Shared Boyfriend's Behalf Somehow Found Not Guilty

Jessica Mang, who traded material non-public information based on tips obtained by her Mizuho investment banker boyfriend, Thomas Ammann, because he promised to take her on vacation afterward and also because she thought his entrusting her with such a high level task was a sign he wanted to get serious, was cleared by a jury today, as was Christina Weckwerth, Thomas Ammann's other girlfriend/execution trader.