SDNY COURTHOUSE, August 12 – A Royal Bank of Canada analyst who soon after graduating from NYU Business School bought options in a company being eyes for a takeover by RBC client Siris Capital was presented in shackles, momentarily, in the U.S. District Court for the Southern District of New York Magistrates Court on August 12.
Bill Tsai was wearing a red T-shirt and had a Shaw Pitman defense lawyer. SDNY Magistrate Judge Henry Pitman, soon to step down from the bench, told Tsai that if he runs out of money he can apply for free counsel.
The US Attorney's Office, meanwhile, agreed that Tsai could be freed on $100,000 bond to be signed by his uncle David Tsai. So Tsai, unlike so many in the Mag Court, was released. On PACER, the case number 19-mj-7464 was still sealed, even after Tsai had been freed. Inner City Press will have more on this.
Back on July 30, the day after insider trading tipper Sebastian Pinto-Thomaz was sentenced to 14 months in prison, one of his two tippees Jeremy Millul was sentenced to five months, not to begin until January 9, 2020 so that Millul can (probably) witness the birth of his third child.
U.S. District Court for the Southern District of New York Judge Jed S. Rakoff said he had planned to sentence Millul to nine months, for general deterrence. But the arguments of Millul's Arent Fox LLP lawyer Glenn C. Colton about probable non eligibility for a camp and about ICE detention led him to reduce that by four months.
One might wonder if there can be contingency fees for sentencing reductions.
More seriously, Judge Rakoff cited criminologists for the proposition that jail time is the best deterrent particularly for hard to detect crimes like insider trading. He also emphasized that Millul had done it twice, in 2016 and 2018.
Millul's lawyer said he had faced anti-Semitic attacks in France and does not want to return there. Judge Rakoff asks if his mother doesn't live in Israel and couldn't he go there. The response seemed to be that then his sons would face military service.
Judge Rakoff said that while the US is strengthened by those who come here, if they commit crimes they may be deported. More generally he mused how criminals do not think of their families during the crime, only when they are caught.
The second tippee Abell Oujaddou faces sentencing on September 5 at 3 pm and, since he testified for the government (but also, as noted, welshed on paying the full agreed kickback to Pinto-Thomaz), probation is predicted. Inner City Press will be there. and noted during the sentencing that Pinto-Thomaz's lawyer's argument in the trial had been to "throw his mother under the bus." The lawyer, Henry Mazurek with another client facing a jury across the hallway, said it was more complicated that that. And complicated it is.
Sentencings in the SDNY often involve the invocation of the sins of the father, absent fathers, abusive fathers. This absent father was different than the norm: a Brazilian industrial magnate. Equally absent, even as Sebastian's mother sent to open luxury stores in Asia. Call it the Nanny Diaries.
When Sebastian spoke, just before sentencing, it was strange to hear his voice after weeks of the trial, him sad faced in the 500 Pearl Street lobby or working his cell phone in the plaza outside. Then it was said he was looking for work in Houston. Now he is also an EMT, and offering to do community service.
Judge Rakoff was his usual erudite self, calling the sentencing guidelines irrational and saying that these days, AUSAs probably wish more defendants went to trial rather than, like 97%, pleading out. The AUSA here, Christine I. Magdo, spoke of the need for general deterrence. Co-defendant Jeremy Millul is to be sentenced on July 29 - Inner City Press aims to be there, watch this site.
He was barely 30 years old but was publicly traded paint company Sherwin Williams' main contact at S&P when it moved to acquire Valstar in 2016. Mysteriously a hairdresser Abell Oujaddou linked to both Sebastian and to his mother Nathalie Pinto-Thomaz made large purchases of Valspar stock and options and fell under suspicious by FINRA. A Jeremy Millul made even larger trades, of options. On April 24 the defense was barred from putting Millul's mother on the stand, to testify about another bank account and more, Inner City Press was informed.
Late morning on April 26 the the U.S. District Court for the Southern District of New York courtroom of Judge Jed Rakoff, the jury was read the elements of the crime and told that if they did not decide today, the next day would be Tuesday. The marshall was sworn, to take them to a "private and convenient place" - an adjacent room. Where well before the 2:30 pm knock off time for the more covered college basketball prosecution upstairs, the jury decided guilty. The sentencing will be in July. We'll have more on this.
On April 25 prosecutor Christine I. Magdo called the defense shatter-shot and desperate. She showed that Sebastian Pinto-Thomaz was in the WhatsApp and Viber contracts of jewerly dealer and Valspar options trader Jeremy Millul. But as defense lawyer Henry Mazurek pointed out after the jury was gone for the day, this doesn't prove that the two men communicated over the platforms, which when installed demand or trick a user into importing all of their contacts from email, for example.
Judge Rakoff said the jury could make a reasonable inference from the contacts information, adding that in the view of one reasonable observer Mazurek has engaged in his summation in gross speculation. Mazurek asked, Who is that reasonable observer? Rakoff shot back, you'll have to speculate. He will instruct the jury for a half hour on April 26 then they will deliberate. According to the government, the health and safety of the stock market is on the line. Watch this site - more here on Patreon.
Earlier on April 25 the defense put on the stand an IT consultant who showed charts he's made of hairdresser and tipee Abell Ajouddou's stock trades including Citigroup, JPM Chase and Bank of America, twice, and compare the volume of his communications, cell phone and text message, with the mother (65%) and son (35%).
The government counter-punched by noting that WhatsApp and Viber calls were not included, and that Bank of America, Sprint and Blackberry / RIM were double counted. It was a strange ending to the evidence. After summations, the jury will begin deliberating early on April 26. Watch this site, and @SDNYLIVE.
Back on April 18, before the disenchantment, an issue arose after the jury left for lunch as to whether Oujaddou had told his then-lawyer Robert Anello to tell the government he had paid Sebastian Pinto-Thomaz about of a "tip fund" from his salon, or as he claimed earlier in the week from cash he and his wife kept in the apartment after the power outrages in Super Storm Sandy. Judge Rakoff asked for Anello's telephone number, dialed it and put him on speaker phone. There, with the consent of Oujaddou's current lawyer, Anello said, yes, his client had told him to convey that. So Oujaddou can be cross examined about that, and about the unredacted PSR report the government must now give to defense counsel. The jury will not sit on Good Friday, so things may come to a head on the afternoon on Thursday, April 18, between an equity analyst and a FINRA witnesses up from Baltimore. Watch this site.
the second day of the trial of Sebastian Pinto-Thomaz on four felony counts proceeded, with Oujaddou in the stand. Assistant U.S. Attorney Christine I. Magdo walked him through his Charles Schwab accounts, and photos from the Home Depot on 23rd Street where he said he handed Sebastian $7,500 in cash he kept in his apartment with his wife, since Hurricane Sandy.
But when the jury left, questions were raised. Oujaddou had been threatened with a lawsuit for sexual assault by a woman whom he fired from the salon, just before marrying his Superstorm Sandy co-hoarder wife. This information, who said on the record, was deemed too prejudicial for the jury to hear.
Sebastian's lawyer Henry Mazurek argued that it was relevant, that Oujaddou's need for hush money for the threatened lawsuit explained his trading. Even when this was denied, he made a point of saying that hush money is in the news, and that being an alleged sexual assaulter may not be so prejudicial, given that the current US President was elected. Judge Rakoff riffed, I am interested in your political analysis - but not as a lawyer. And thus ended Day Two of US v Pinto.
Career not destroyed, Sebastian Pinto-Thomaz asked the court this year to travel to Houston for a possible new job. But for two week he's set to be in Judge Rakoff's courtroom - and after that, nobody knows. At the lunch break on April 17 he was out in front of 500 Pearl Street working his cell phone. Watch this site.
