Insider-Trading Tipster Deserves More Than 18 Months, U.S. Says

(Bloomberg) -- The son of a pharmaceutical company director who provided secret information to a participant in a global insider-trading network should be sentenced to more than 18 months in prison, U.S. prosecutors told a judge in New York.

Telemaque Lavidas was convicted in January of leaking corporate secrets he got from his father, a director of Ariad Pharmaceuticals Inc. Lavidas is set to be sentenced June 25.

“Lavidas is a sophisticated businessman who well understood the duties and responsibilities to keep confidential corporate information,” prosecutors said in a court filing Tuesday. “Despite a stellar education, his family’s extraordinary wealth, and all the advantages he was given in life, the defendant chose to engage in criminal conduct multiple times over a three-year period.”

Lavidas was the first U.S. defendant tried in connection with an international insider-trading ring that generated tens of millions of dollars on illegal tips about drug companies from investment bankers and corporate insiders.

He was convicted of passing inside information about Ariad to George Nikas, a friend who owned a chain of Greek restaurants in New York. Nikas is charged with insider trading and is believed to be in Greece.

Prosecutors told U.S. District Judge Denise Cote that Lavidas should get less than 6 1/2 years, the maximum called for under federal sentencing guidelines, but “substantially in excess” of the 18 months recommended by U.S. probation authorities. Lavidas has been held in a New York jail since his arrest in October.

Lavidas last week asked Cote to sentence him to no more than the eight months he’s already spent behind bars. His lawyer, Jonathan Streeter, pointed to the sentence of home detention imposed on former Goldman Sachs Group Inc. banker Bryan Cohen, who pleaded guilty in a related insider trading scheme. In Cohen’s case, prosecutors had sought a three-year sentence.

Streeter didn’t respond to an email seeking comment on the government’s sentencing recommendation.

The case is U.S. v. Lavidas, 19-cr-00716, U.S. District Court, Southern District of New York (Manhattan).

©2020 Bloomberg L.P.