Danielle Chiesi Seeks Less Prison Time For Insider Trading

Former hedge fund analyst Danielle Chiesi, who is at the center of the massive insider trading investigation that is sweeping Wall Street, is looking to mitigate the length of her prison sentence by blaming her illegal conduct on a "toxic" sexual relationship she had with her boss, Mark Kurland. Chiesi's lawyers wrote in a sentencing memorandum yesterday that New Castle Funds' co-founder Mark Kurland, “engaged in a ‘vicious cycle of abuse' and ‘psychological exploitation' to turn Dani into his ‘virtual servant.'” Kurland and Chiesi had an affair between 1993 and the time they were arrested in October 2009. Kurland is married. Chiesi, who has pled guilty to insider trading charges involving passing tips not only to New Castle portfolio managers and traders, but also to Raj Rajaratnam, among others, also had an affair with senior IBM executive Robert Moffat, who was one of her sources of illegal information. In the sentencing memorandum, Chiesi's attorneys asked the judge for less than the 27 months that Kurland received for his role in the scheme, due to his alleged manipulation of her in his position as her boss and lover. Prosecutors argued yesterday that she should receive a sentence of between 37 to 46 months in prison. She will be sentenced on June 30 in federal court in Manhattan. For more on the Danielle Chiesi story, be sure to read this inside account from Fortune magazine.