Michael Avenatti Googled ‘insider trading’ before Nike meeting

January 27, 2020, 9:16 PM UTC
NEW YORK, NY - MARCH 25: Michael Avenatti, the former lawyer for adult film actress Stormy Daniels' and a fierce critic of President Donald Trump, speaks to the media after being arrested for allegedly trying to extort Nike for $15-$25 million on March 25, 2019 in New York City. The counts against Avenatti are to include conspiracy to transmit interstate communications with intent to extort, conspiracy to commit extortion and more. Avenatti is expected to answer to the charges later Monday.(Photo by Stephanie Keith/Getty Images)
Stephanie Keith—Getty Images

Celebrity attorney Michael Avenatti did internet research on put options and insider trading before trying to extort millions of dollars from Nike Inc., federal prosecutors told a judge.

Lawyers for the government on Monday told U.S. District Judge Paul Gardephe in Manhattan that they intend to show Avenatti’s search history to jurors at a two-week trial getting underway this week, calling it evidence of the California attorney’s state of mind during the alleged crime. At the time, Avenatti was representing a youth basketball coach with claims against Nike.

Gardephe barred prosecutors from mentioning the search terms in their opening statement and said he’d rule later on whether and how the evidence can be used in the trial. Avenatti’s lawyers called the search terms irrelevant and said the evidence would improperly sway the jury in a case that doesn’t include insider trading allegations.

Avenatti gained a national profile while representing an adult-film actress in a lawsuit against President Donald Trump. The attorney was charged in March for allegedly demanding that Nike pay him and a colleague as much as $25 million in exchange for canceling a scheduled press conference that would damage the company’s finances and reputation. The press conference would have been used to go public with claims by his client, Gary Franklin, that the athletic apparel company made illegal payments top high school basketball players.

Arrested again two weeks ago for allegedly violating his bail conditions, Avenatti appeared in court Monday wearing a suit instead of the jail-issued garb he wore to a recent pre-trial hearing. He stood with his legal team to face dozens of potential jurors who entered a large courtroom to fill out a questionnaire and be considered for the jury. Opening statements could start Tuesday or Wednesday.

Gardephe said Monday the trial “will not involve an exploration” of whether Nike sought to corrupt youth basketball. Avenatti may, however, tell the jury about Nike’s alleged motive for going to prosecutors with its claim of extortion against him, the judge said. Avenatti argues Nike was trying to curry favor with prosecutors by offering up Avenatti “on a silver platter,” as the judge put it.

Nike argued in court filings that Avenatti was trying to “put the government’s and Nike’s conduct on trial” because he can’t dodge the video and audio evidence of his demands on the company.

“He intends to misdirect the jury—pointing their attention anywhere but on his own conduct—in the hope that at least one of them will be confused by evidence that is legally irrelevant and factually inaccurate,” Nike said.

Avenatti’s lawyers, for their part, described the government’s focus on their client’s internet research as a red herring.

“The obvious implication is that Mr. Avenatti illegally traded in Nike stock based upon information obtained from Coach Franklin,” the defense lawyers said in a Jan. 24 court filing. “That did not happen, the government has no evidence that it did, and Mr. Avenatti is not charged with insider trading.”

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