Jun 30, 2012 01:56 AM EDT
Two former hedge fund portfolio managers and an analyst charged in a $62 million insider trading scheme will go to trial together in October, a U.S. judge ruled on Thursday.
Lawyers for each of the defendants had sought to convince U.S. District Judge Richard Sullivan in Manhattan that they were entitled to separate trials.
Prosecutors in Manhattan announced the charges against the three in January in a sweep dubbed "Operation Perfect Hedge" by the Federal Bureau of Investigation.
Their arrest was part of the government's campaign to root out illicit trading on Wall Street, in which a total of 70 people have so far been charged.
A lawyer for Todd Newman, who worked at hedge fund Diamondback Capital Management, told the judge that a jury would be prejudiced against his client if it was allowed to hear the size of the illicit gains one of the other defendants, Anthony Chiasson, is accused of reaping.
"We have all seen the protests, the 99 percent..." attorney Stephen Fishbein said. Given the ongoing "financial crisis," Fishbein said, "I can't think of a more emotional issue in this day and age."
The judge, however, was not sympathetic.
"I tried a murder trial with the shooter and the look-out at the same time. How do you think they felt?" Sullivan said.
Chiasson and Newman are accused of illegally trading ahead of computer maker Dell Inc's earnings announcements for the first and second quarters of 2008, netting them profits, respectively, of $57 million and $3.8 million.
An attorney for analyst Jon Horvath, of Sigma Capital management, a unit of Steven Cohen's hedge fund SAC Capital, had also argued for a separate trial.
Horvath was charged with one count of conspiracy to commit securities fraud and one count of securities fraud. Chiasson and Newman both face one count each of conspiracy to commit securities fraud as well as several counts of securities fraud.
All three men have pleaded not guilty and are contesting the charges.
The government's case is based in part on testimony by three former analysts turned government cooperators: Sandeep "Sandy" Goyal, Jesse Tortora and Spyridon Adondakis. All three previously pleaded guilty to related insider trading charges.
The trial is scheduled for October 29.
The case is US v. Todd Newman et al, U.S. District Court for the Southern District of New York, No. 12-mj-0124 and 12-cr-00121.
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