2 Former Hedge Fund Managers Found Guilty in Insider Trading Case Two former hedge fund managers were found guilty on Monday of fraud and conspiracy, the latest convictions in the government's unabated campaign to eliminate illegal conduct on Wall Street trading floors. After three days of deliberations, a jury convicted Anthony Chiasson, a co-founder of Level Global Investors, and Todd Newman, a former portfolio manager at Diamondback Capital Management. The two had denied charges that they participated in a conspiracy that made more than $70 million illegally trading technology stocks. "With today's guilty verdicts, Todd Newman and Anthony Chiasson join the ranks of high-level investment fund managers who are being made to answer for their extraordinarily bad risk-reward analysis about what is right and what is wrong," Preet Bharara, the United States attorney in Manhattan, said in a statement. Like scores of privileged professionals before them, Newman and Chiasson are finding out the hard way that the opportunity cost of gaining an illegal edge in the market is the loss of one's liberty. Juries in Federal District Court in Manhattan have convicted all 11 insider-trading defendants who have taken their cases to trial since 2009, the year that prosecutors began bringing charges arising out its multi-year investigation into criminal activity at hedge funds. Of the 72 people charged with insider trading crimes -- a collection of traders, corporate executives, consultants and lawyers -- the United States attorney's office in Manhattan has secured 71 guilty pleas or convictions. Deep Shah, an indicted former analyst at Moody's, has been declared a fugitive. Both Mr. Chiasson and Mr. Newman sat stone-faced as the jury foreman announced the guilty verdict. After it was read, Mr. Newman slouched in his chair; Mr. Chiasson stared blankly. Judge Richard J. Sullivan, the judge presiding over the case, set sentencing for April 19. Until then, they are free on bail. Reid H. Weingarten, a lawyer for Mr. Chiasson, 39, said his client would appeal. Stephen Fishbein, a lawyer for Mr. Newman, 48, did not immediately respond to a request for comment. The trial of Mr. Chiasson and Mr. Newman grew out of one of the bigger insider trading conspiracies uncovered by prosecutors. In Nov. 2010, the F.B.I. raided the offices of Level Global and Diamondback. About a year later, prosecutors charged Mr. Chiasson, Mr. Newman and six others with a participating in a "tight-knit circle of greed" that earned illegal profits by trading the stocks of Dell, the computer company, and Nvidia, a chipmaker. Six of the eight defendants pleaded guilty, but Mr. Chiasson and Mr. Newman fought the charges, denying that they traded while knowingly in possession of secret information. The case against Mr. Chiasson and Mr. Newman was seen as more challenging for the government than many of its previous insider-trading prosecutions. In earlier cases, including the trial of the former hedge fund manager Raj Rajaratnam, the government played for the jury dozens of secretly recorded incriminating conversations between Mr. Rajaratnam and his sources. In this case, however, the government did not have either defendant on wiretap. Instead, prosecutors were forced to rely on witness testimony, along with a smattering of e-mails and instant messages that they said showed that Mr. Chiasson and Mr. Newman traded while knowingly armed with secret corporate information. The government built its case around the testimony of two key witnesses: Spyridon "Sam" Adondakis, who worked for Mr. Chiasson at Level Global, and Jesse Tortora, who was supervised by Mr. Newman at Diamondback. Both testified that they received secret financial information from sources inside the technology companies and then passed the tips along to their bosses. At Level Global, Mr. Chiasson used the confidential data to make a big bet against Dell and - in a single trade - earn more than $50 million, according to prosecutors. During cross examination, as well as opening and closing statements, the defense attacked the credibility of Mr. Adondakis and Mr. Tortora. The two were depicted the two witnesses as part of a group of young, brash Wall Street traders that partied together in the Hamptons and called themselves the "Fight Club," named after a secret, underground fight club. Both were also portrayed as pliant cooperators seeking to curry favor with the government in the hopes of receiving a lenient sentence. Defense lawyers called Mr. Adondakis an "easy, practiced liar" and Mr. Newman was labeled as someone who "cannot and should not be trusted." The defense also argued that both Mr. Chiasson and Mr. Newman had no idea that the information provided to them by their "Fight Club" underlings came from secret sources inside the technology companies, but instead was based on fundamental research. A jury of 12 New Yorkers, which included a dog walker and a retired postal worker, rejected their defenses. "They had a secret pipeline to insiders at Dell and Nvidia," said a prosecutor, Antonia Apps, in her summation. They had confidential information that other investors didn't have. Level Global and Diamondback had close ties to SAC Capital Advisors, the $14 billion hedge fund run by Steven A. Cohen that has become a central focus of the government's insider trading inquiry. Mr. Chiasson co-founded Level Global with David Ganek, a former star trader at SAC who earned more than $100 million working for Mr. Cohen. The two left SAC and started Level Global in 2003. At its peak, Level Global managed about $4 billion in assets. In 2010, Goldman Sachs acquired a minority stake in the fund. While Mr. Chiasson operated behind the scenes, Mr. Ganek cut a prominent figure in New York society. Mr. Ganek and his wife, the novelist Danielle Ganek, are noted art collectors and own an apartment at 740 Park Avenue, one of the city's most prestigious residential buildings. During the trial, Judge Sullivan ruled that Mr. Ganek was a co-conspirator in the case. Mr. Ganek has not been charged with a crime, and his lawyer said there is no evidence that he knew about any inside information. Diamondback, where Mr. Newman worked as a portfolio manager, was started by Richard Schimel and Larry Sapanski, two former SAC employees. The fund grew to $6 billion in assets under management before becoming ensnared by the insider trading investigation. Another former Diamondback employee, Anthony Scolaro, pleaded guilty to insider trading in late 2010 and cooperated with the government. Level Global closed its doors shortly after the F.B.I. raid. Last week, Diamondback announced that it was shutting down after a wave of investors withdrew money from the fund. SAC has other connections to this case: one of the members of the conspiracy who pleaded guilty, Jon Horvath, was an SAC analyst, and his boss, Michael Steinberg, has been named an unindicted co-conspirator. Barry Berke, a lawyer for Mr. Steinberg, declined to comment.