Friday, October 23, 2020

Son of Ariad Pharmaceutical Director Convicted in Insider-Trading Case


The son of a pharmaceutical-company director was convicted of leaking company secrets to a close friend who prosecutors say was part of a global insider-trading network.

Telemaque Lavidas, 39, was the first U.S. defendant tried in connection with an insider scheme that generated tens of millions of dollars on illegal tips about drug companies from investment bankers and corporate insiders. Though Lavidas played a small role in the plot, his trial in New York shed light on how a corrupt Swiss trader and others exploited contacts on three continents for market-moving information.

Lavidas was found guilty Wednesday on all seven charges, including wire fraud, securities fraud and conspiracy, after leaking information about Ariad Pharmaceuticals Inc. that he got from his father, who sat on the board. The jury found Lavidas tipped off Georgios Nikas, a Greek businessman with property and restaurants in New York. Nikas used the secrets to make $4.7 million in trading profits, according to the government.

Lavidas got less in return, prosecutors said. He passed the tips out of friendship with Nikas and in exchange for a $500,000 investment by Nikas’s wife in his startup nutrition-bar business, Mediterra Inc., they said.

- Advertisement -

U.S. District Judge Denise Cote said she’ll sentence Lavidas on April 17. He faces as long as eight years in prison. The judge refused a request by Lavidas to be sentenced before the end of February.

Lavidas has been confined since his October arrest in Manhattan’s Metropolitan Correctional Center, after Cote denied his proposed $26 million bail package before the trial. Lavidas would likely serve his sentence in a less restrictive prison than the MCC, the federal lockup where accused sex trafficker Jeffrey Epstein hanged himself in August while awaiting trial.

“It is a difficult place for a person like him to be,” Lavidas’s lawyer, Jonathan Streeter, told the judge.

Star Witness

- Advertisement -

Family members wept in court on Wednesday as Lavidas removed his suit jacket, belt and tie in preparation to be moved back to the MCC.

The jury deliberated for less than a day at the end of a one-week trial. The government’s star witness against Lavidas was a former Swiss trader, Marc Demane Debih, who said he participated in the network and made about $70 million on insider trades.

Demane Debih pleaded guilty to 38 counts and agreed to cooperate with prosecutors in hopes of leniency when he’s sentenced. He also agreed to forfeit $49 million in illegal profit. A former Goldman Sachs Group Inc. banker, Bryan Cohen, accused of leaking tips to Demane Debih, pleaded guilty to conspiracy on Jan. 7, a day after the Lavidas trial began.

The Swiss trader testified that he got profitable tips about Ariad from Nikas, who said he had access to the company’s board through Lavidas and his father, Athanase Lavidas, who isn’t charged. The elder Lavidas, who is no longer on the Ariad board, is the chief executive officer of Lavipharm SA, a family-owned drug company based in Greece. Demane Debih said he met Telemaque Lavidas once, in 2011, and never witnessed him passing confidential information.

The evidence against Lavidas was mostly circumstantial, with prosecutors focusing on a timeline that showed when market-moving news was provided to Ariad’s board, when Lavidas called his father and Nikas and when Nikas made big, profitable bets on Ariad stock. Nikas is in Greece and considered a fugitive by the U.S.

Defense lawyers argued that the Ariad tips came to Nikas from from an investment banker at Centerview Partners who was part of the ring, and that Lavidas never passed any company secrets.

Demane Debih, who has been in custody since his arrest in Serbia in 2018, testified that he had a safe filled with cash in his apartment and paid $12 million to a French art collector, John Dodelande, for tips he got from investment banker sources.

Dodelande, who isn’t charged, got information from investment bankers including Darina Windsor, the former Centerview banker, and Benjamin Taylor, who worked at Moelis & Co., according to prosecutors. Windsor and Taylor, who shared a London apartment, face criminal charges but are not in U.S. custody. Windsor had access to information about Ariad through her work at Centerview, the defense team said.

Evidence showed that Taylor and Windsor sometimes communicated in code, using the pet names “Pops” and “Popsy” in emails. They’re charged with providing inside information on 22 companies.

The case is U.S. v. Lavidas, 19-cr-716, U.S. District Court, Southern District of New York (Manhattan).



Goldman Sachs agrees $3 billion settlement with US DoJ over 1MDB corruption scandal

Goldman Sachs has agreed to pay nearly $3bn (£2.3bn) in the US to end a probe of its role in Malaysia's 1MDB corruption scandal. The...

Hong Kong fines Goldman Sachs $350 million over 1MDB scandal

Goldman Sachs ignored multiple red flags over the multibillion-dollar fundraisings it arranged for state fund 1Malaysia Development Berhad, Hong Kong’s financial regulator said on...

Texas attorney general Ken Paxton fires top aide who accused him of bribery

Lacey Mase, one of the top aides who accused Texas Attorney General Ken Paxton of crimes including bribery and abuse of office, has been fired, she told The...

Fundraiser Elliott Broidy pleads guilty in foreign agent case linked to 1MDB

Major Republican Party and Trump fundraiser Elliott Broidy pleaded guilty Tuesday to acting as an unregistered foreign agent, admitting to accepting millions...

Germany issues international arrest warrant for founders of law firm at the centre of Panama Papers

Germany has issued international arrest warrants for the two founders of the firm at the centre of the tax haven scandal exposed by the...

Latest News

This Week

EU takes legal action against Cyprus and Malta over investment for citizenship scheme

The European Union’s executive said on Tuesday it was launching legal action against Cyprus and Malta over their investor citizenship programmes, also known as...

Judge orders billionaire Greg Lindberg to report to prison after conviction for bribery

Try as he might to extend his freedom, Durham businessman and convicted felon Greg Lindberg will become a federal inmate on Tuesday. Lindberg, the billionaire...

Rapper Nuke Bizzle charged with COVID-19 relief aid fraud after bragging in music video

A rapper who bragged about defrauding the government’s unemployment program in a music video has been arrested on federal charges of carrying out the...

Crown Melbourne casino faces money laundering probe

Crown Resorts is facing a new threat to its casino licences and the prospect of multimillion-dollar fines after it was informed by Austrac, the...

Adblock Detected!

Our website is made possible by displaying online advertisements to our visitors. Please consider supporting us by whitelisting our website.

Enable Notifications    Ok No thanks