Wesley Wang, a former analyst for SAC Capital Advisors LP’s Sigma Capital unit, was sentenced to two years’ probation for insider trading after cooperating with a government investigation.
Wang recorded phone calls and wore a body wire, incriminating about 20 people in insider trading, some of whom haven’t yet been charged, prosecutors said. U.S. District Judge Jed Rakoff, citing Wang’s cooperation, yesterday sentenced him to probation, instead of as many as 37 months in prison called for in federal sentencing guidelines.
“I apologize to the court and the public for breaking the insider trading laws,” Wang, 39, told Rakoff in a hearing in Manhattan federal court. “I’ve tried to make up for all the mistakes I’ve made. I hope your honor can see that I’ve left my former life behind and have started on a new path.”
Wang pleaded guilty last year to passing illegal tips to former Sigma Capital portfolio manager Dipak Patel and to Whitman Capital LLC hedge fund founder Doug Whitman. Wang’s testimony at Whitman’s criminal trial helped lead to his conviction on charges of conspiracy and securities fraud, prosecutors said.
“I found Mr. Wang to be a totally truthful witness,” said Rakoff, who presided over Whitman’s trial. He said Wang’s cooperation “really goes beyond that of even most cooperators.”
Rakoff said he has heard criticism voiced about the U.S. criminal justice system for allowing cooperating witnesses to avoid having to serve any prison time.
“Many countries of the world look with disfavor upon the American user of cooperators, especially if that cooperation results in no jail or a very significant lesser sentence,” he said.
The judge said leniency is warranted because prosecutors “could not achieve the marvelous successes they’re had in sophisticated crimes, like insider trading, without asking judges to give a very substantial benefit to cooperators.”
Patel, who ran a five-person team investing in technology stocks before leaving SAC in 2011, hasn’t been charged with a crime.
Wang is one of eight current or former SAC employees linked by government prosecutors and regulators to insider trading while at the firm. They include Mathew Martoma, a former SAC portfolio manager who is charged with using inside information about the clinical trial of an Alzheimer’s drug to help SAC make $276 million in profits and averted losses. Prosecutors have called it the largest insider-trading scheme in history.
Martoma is charged with passing inside information on the drug trial to Steven Cohen, SAC’s founder, who allegedly used it to liquidate a $700 million position in the companies promoting the drug. Cohen hasn’t been charged.
Jonathan Gasthalter, a spokesman for Stamford, Connecticut-based SAC, has said that Cohen and SAC did nothing wrong.
Wang was an intern for Whitman’s firm before leaving to work for SAC in 2002. He told jurors that he and Whitman, whom he called a friend and mentor, exchanged tips on Cisco Systems Inc., Polycom Inc. and Marvell Technology Group Ltd.
Prosecutors said Wang also admitted to sharing illegal tips with his bosses at Trellus Management Co., where he worked as a consultant from 2005 to 2008. Wang’s Trellus bosses weren’t named in prosecutors’ Jan. 2 letter to Rakoff.
Adam Usdan, a spokesman for New York-based Trellus, didn’t return a phone message seeking comment.
In the Jan. 2 letter, prosecutors said agents with the Federal Bureau of Investigation learned from an unnamed cooperating source in 2008 that Wang was involved in insider trading. The source recorded incriminating telephone calls and meetings with Wang, they said.
From November 2008 to January 2009, the FBI tapped Wang’s phones, the prosecutors said. He later agreed to cooperate with the government’s insider-trading investigation, recording phone calls and meetings to gather incriminating evidence on people with whom he had exchanged inside information, according to the letter.
The case is U.S. v. Wang, 12-cr-541, U.S. District Court, Southern District of New York (Manhattan).