SAC Capital Advisors LP compliance officers and the firm’s outside lawyers questioned Jon Horvath in 2011, when he was an analyst at the firm, about insider trading with expert networker John Kinnucan and the firm Primary Global Research LLC, U.S. prosecutors said.
While Horvath didn’t make any false statements, he was “not forthcoming” about his involvement in any insider-trading scheme during two separate sessions with SAC compliance officers and Martin Klotz, an outside attorney for the fund, prosecutors said in a letter to the court.
Horvath, who worked at SAC’s Sigma Capital Management LLC unit, was first charged with being part of an insider trading ring by federal prosecutors in the office of Manhattan U.S. Attorney Preet Bharara in February 2012. Horvath pleaded guilty in September 2012 and agreed to cooperate with the U.S. He will be a witness against his former boss, SAC fund manager Michael Steinberg, who goes on trial next week.
Kinnucan, founder of Broadband Research LLC, pleaded guilty in July 2012 to obstruction of justice and passing illegal tips to hedge-fund clients about technology companies.
He pleaded more than a year after sending an e-mail to his clients announcing that he’d rejected a Federal Bureau of Investigation request to plead guilty and secretly record their calls.
“The government presently intends to elicit at trial that, while Horvath did not make any false statements during those interviews, he was not forthcoming about his involvement in the insider-trading scheme to which he subsequently pleaded guilty,” assistant U.S. attorneys Antonia Apps and Harry Chernoff wrote to the judge.
Apps and Chernoff said that the government has learned from Horvath that he was questioned by SAC’s compliance team, Klotz and other lawyers at Wilkie Farr & Gallagher LLP.
SAC Nov. 8 pleaded guilty to insider trading . U.S. District Judge Laura Taylor Swain in Manhattan said she hasn’t decided whether she will accept the Stamford, Connecticut-based hedge fund’s plea.
Barry Berke, a lawyer for Steinberg, didn’t immediately return a voice-mail message left at his office seeking comment about the letter.
The criminal cases are U.S. v. Steinberg, 12-cr-00121, U.S. District Court, Southern District of New York (Manhattan), and U.S. v. SAC Capital Advisors LP, 13-cr-00541, U.S. District Court, Southern District of New York (Manhattan).
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