Latest insider trading case focuses on hedge funds

Chiasson also was paid well, Weingarten said, making "A-Rod-type money" in 2007, a reference to the more than $20 million annual salary of New York Yankees slugger Alex Rodriguez.

Weingarten said it was not unusual to get information from public companies that stage road shows and seek attention from analysts and others in a quest to raise money.

He blamed Sam Adondakis, a former Level Global analyst who has pleaded guilty in the case, for his client's trouble, saying he was leading a double life by portraying himself as a responsible analyst to Chiasson and others while making dirty deals to get information he should not have.

The lawyer said Chiasson's Dell bet was consistent with his contrarian nature and common sense, since Dell's stock had run up unreasonably before its drop after earnings. He also said the Dell trade was not unusual for a $4 billion hedge fund.

Stephen Fishbein, Newman's lawyer, said his client had no idea that a corrupt analyst was feeding him inside information, since he disguised it as legitimate research.

He noted that Newman made more than 32,000 trades in 366 securities in 2008.

He said talking to company insiders was common in the industry and was "a perfectly acceptable way to do research."

Fishbein said he would prove through his client's trades, which included gains and losses in the same stocks, that he did not know secrets.

"Newman did not trade as if he was getting tomorrow's news today," he said.