SAC Capital manager's insider trading trial startsNovember 20, 2013 @ 3:58 pm
NEW YORK (AP) - A prosecutor told jurors at the start of the first insider trading trial of a portfolio manager for SAC Capital Advisors that insider trading was relied upon to boost slumping results in 2007, but a defense lawyer said Wednesday that his client was the victim of a corrupt analyst who cooperated with the government to escape a long prison sentence.
The differing analysis of the facts at the trial of 41-year-old Michael Steinberg came during opening statements in U.S. District Court in Manhattan. The trial began just weeks after SAC Capital agreed to pay a record $1.8 billion to settle civil and criminal insider trading charges. The Stamford, Conn.-based company is owned by billionaire businessman Steven A. Cohen. He has not been charged criminally but faces civil claims.
Assistant U.S. Attorney Antonia Apps told jurors that Steinberg made illegal trades between 2007 and 2009 after receiving insider information from an analyst, Jon Horvath of San Francisco. Horvath pleaded guilty last year to insider trading charges and agreed to testify against Steinberg as part of his plea deal.
Apps said Steinberg "chose to break the law" after losses were incurred and he needed to boost his results.
"He chose to break the law to make big money for himself and the company for which he worked," she said. "He did it to get an illegal edge."
She added: "He knew it was wrong to trade on that information but he did it anyway."
Defense lawyer Barry Berke described Horvath as the government's star witness and said he had framed his client to avoid prison himself.
"He needed to point the finger at somebody to get a deal," he said. "He chose self-interest over the truth."
Apps said Horvath was part of a circle of four analysts who used contacts at public companies to gain insider information that they would pass on to each other and to their own portfolio managers.
She said the government would prove its case through four turncoat witnesses who had pleaded guilty to the insider trading scheme, including two former employees of public companies. She said their testimony would be corroborated through trading and phone records, as well as emails between participants.
Berke, though, said the witnesses would twist innocent information to make it seem Steinberg had committed a crime.
"Mr. Horvath is so clearly trying to rewrite history ... to get a deal for himself," he said.
(Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)
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