WPCNR FBI WIRE. From the Federal Bureau of Investigation. February 14, 2013:
Preet Bharara, the United States Attorney for the Southern District of New York, announced that STEVEN FORTUNA, who co-founded the hedge fund S2 Capital LLC (S2), was sentenced Wednesday to two years of probation for his participation in an insider trading scheme in which he obtained and traded on material, non-public information (Inside Information) about various publicly traded companies from employees at other hedge funds.
FORTUNA pled guilty in October 2009 to three counts of conspiracy to commit securities fraud and one count of securities fraud pursuant to a cooperation agreement with the government. He was sentenced in Manhattan federal court by U.S. District Judge Sidney H. Stein.
As part of the conditions of his probation, FORTUNA, 50, of Westwood, Massachusetts, was ordered to serve six months of home confinement with electronic monitoring and 120 hours of community service during each of the years of his probation. He was also ordered to pay forfeiture in the amount of $200,000 and a $400 special assessment fee.
According to the information, statements made during FORTUNA’s guilty plea proceeding, and the government’s sentencing submission in his case:
From July 2008 through March 2009, while working as a portfolio manager at a hedge fund he co-founded, FORTUNA obtained Inside Information concerning various technology companies from employees at other hedge funds for the purpose of trading on that information. The Inside Information was disclosed by company insiders in breach of their duties to their respective employers.
For example, in July and August 2008, FORTUNA obtained Inside Information concerning Akamai, Inc. (Akamai) from Danielle Chiesi, a portfolio manager at New Castle Partners, a hedge fund. Chiesi told FORTUNA that Akamai planned to report that its revenue guidance for the following quarter would miss expectations and that, internally, the company believed that its stock price would fall following the quarterly earnings announcement. FORTUNA executed trades based on that Inside Information, and earned approximately $2.4 million in profits.