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United States v. Nikas

United States District Court, S.D. New York

December 30, 2019

UNITED STATES OF AMERICA,
v.
GEORGIOS NIKAS, a/k/a “George Nikas, ” and TELEMAQUE LAVIDAS, Defendants.

         APPEARANCES:

          For the Government: Daniel M. Tracer Richard A. Cooper U.S. Attorney's Office, SDNY One Saint Andrew's Plaza

          For defendant Lavidas: Jonathan R. Streeter Siobham M. Namazi Dechert LLP

          Eric H. Sussman Jennifer Achilles Reed Smith LLP

          OPINION AND ORDER

          DENISE COTE United States District Judge.

         On October 7, 2019, defendant Telemaque Lavidas (“Lavidas”) was indicted for conspiracy, securities fraud, and wire fraud in connection with his alleged participation in an insider trading scheme involving the securities of Ariad Pharmaceuticals, Inc. (“Ariad”). The indictment charges Lavidas with committing these crimes with his close friend Georgios Nikas (“Nikas”).[1] Nikas, a Greek citizen, remains at large.

         Through a motion in limine filed on December 11, 2019, Lavidas seeks to exclude statements made by Nikas to his close friend and their alleged co-conspirator, Marc Demane Debih (“Demane”). Demane will be a Government witness at the trial, which is scheduled to begin on January 6, 2020. The Government cross-moved on December 11 to admit these statements by Nikas to Demane. The motions were fully submitted on December 16.[2]Through an Order of December 20, the Court ruled that the statements would be admitted pursuant to Rule 804(b)(3), Fed.R.Evid. (“Rule 804(b)(3)”). The reasons for that ruling are set forth below.

         Background

         The indictment alleges that Lavidas provided Nikas with material nonpublic information about Ariad on three occasions in 2013 and on one occasion in 2015, and that Nikas profitably traded on these tips. The first time that Nikas allegedly traded on inside information about Ariad was in late June 2013. Lavidas's father was a corporate director of Ariad and, according to the indictment, the source of Lavidas's tips to Nikas.

         To establish that Lavidas was the source of Nikas's Ariad-related inside information, the Government seeks to elicit testimony at trial from Demane. Demane was a Swiss trader who had been providing Nikas with inside information since 2010 or 2011. The Government expects Demane to testify that, in 2011, Nikas told Demane that Nikas was privy to inside information about Ariad from Lavidas and Lavidas's father.

         An F.B.I. 302 report, which was provided to the defense as Jencks Act material pursuant to 18 U.S.C. § 3500, relates the substance of the Government's October 31, 2019 interview with Demane (the “302”). As reflected in the 302, Demane, Nikas, and Lavidas attended the same dinner party with eight or nine others in 2011. At this dinner, Nikas introduced Demane to Lavidas. This may be the only time that Demane met Lavidas.

         At some point that same evening, but after the dinner, Nikas told Demane that Nikas “was calling” both Lavidas and Lavidas's father to get information about Ariad. Nikas added that “if there was something happening at Ariad, they would know because [] Lavidas's father was on the board of directors of Ariad.” Demane also stated that Nikas told him that Nikas “gave money” to Lavidas, but he did not mention an amount.[3]

         According to the Government, while Demane tipped Nikas about many stocks, Ariad is the only company about which Nikas provided Demane with inside information. The Government alleges that Demane traded in Ariad securities on two occasions using inside information that he received from Nikas. At trial, the Government intends to present evidence of Demane's trading records, as well as the trading records of eight other sets of traders who are alleged to have profitably traded in ...


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