Sept. 4 (Bloomberg) -- The exchange of evidence in the government’s forfeiture lawsuit against SAC Capital Advisors LP was delayed by a judge until Jan. 6 while the U.S. pursues insider trading prosecutions tied to the hedge fund.
A postponement of the case is warranted until insider trading cases against the company, as well as SAC fund manager Michael Steinberg and former SAC portfolio manager Mathew Martoma, are concluded, Assistant U.S. Attorney Micah Smith told U.S. District Judge Richard Sullivan today in Manhattan federal court. Steinberg and Martoma face separate trials in November.
A federal grand jury in July indicted the Stamford, Connecticut-based hedge fund owned by Steven A. Cohen. The government also filed a related money laundering lawsuit seeking forfeiture of ill-gotten gains. The delay of civil cases while related prosecutions proceed is a standard government request.
“Our concern is the defendants would request to depose government witnesses who may not yet have testified at trial,” Smith said, adding that the stay could be in place until after the Martoma and Steinberg trials are concluded.
Manhattan U.S. Attorney Preet Bharara, who called SAC “a veritable magnet for market cheaters,” said the hedge fund reaped hundreds of millions of dollars in illicit profits through separate insider-trading schemes by at least eight former SAC fund managers and analysts. Cohen has denied any wrongdoing.
Michael Schachter, a lawyer for the hedge fund, said today that the defendants didn’t oppose the request for a stay. He said that the government had already produced “multiple terrabytes” of information.
The judge granted the request saying that by Jan. 6 he expected to receive a letter from the parties about the status of the SAC criminal cases as well as if lawyers in this case believed discovery could begin.
The cases are U.S. v. SAC Capital Advisors LP, 13-cr-00541; U.S. v. SAC Capital Advisors LP 13-cv-05182, U.S. District Court, Southern District of New York (Manhattan).
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