SAC Capital Advisors LP fund manager Michael Steinberg was told by the judge overseeing his insider-trading trial to be prepared to say whether he will testify in his own defense after prosecutors said they expect to finish presenting evidence today.
Assistant U.S. Attorney Antonia Apps told U.S. District Judge Richard Sullivan in Manhattan yesterday that the government plans to rest its case after its last witness, a former Altera Corp. executive convicted of passing illegal tips about his company and Nvidia Corp.
Sullivan told Steinberg’s lawyer, Barry Berke, that after prosecutors finish their case, he will need to know whether the defense will call any witnesses, including Steinberg.
“You will need to let me know who’s going to testify, whether or not the defendant is going to testify,” Berke said.
“It’s a game time decision,” Berke replied.
Sullivan told the defendant he needs to make the decision on his own. “Mr. Steinberg, it’s your call. Do you understand that?” the judge asked.
“Yes, your honor,” Steinberg replied.
The U.S. plans to call as a witness Hyung Lim, who was a product marketing manager at Altera, Apps said. Lim pleaded guilty last year to conspiracy to commit securities fraud and wire fraud.
Lim said at his plea hearing that he received information about Nvidia from an unidentified friend who worked at the technology company’s accounting department that he passed to Danny Kuo, a former investment adviser who worked at Whittier Trust Co. in South Pasadena, California.
Steinberg, 41, who has pleaded not guilty, is charged with conspiracy and four counts of securities fraud for allegedly using inside information to make more than $1 million by trading on Dell in August 2008 and more than $400,000 on a trade in Nvidia in 2009. Steinberg is the first of eight current or former SAC employees charged by the U.S. to go to trial.
Steinberg’s former analyst, Jon Horvath, gave him illegal tips he obtained from insiders at technology companies, according to prosecutors. Horvath and Kuo were members of a circle of friends who obtained inside information they passed onto their portfolio managers to trade on, the U.S. said. Two fund managers were convicted at a trial last year.
Former Neuberger Berman analyst Sandeep “Sandy” Goyal, testified yesterday that he fed inside information about Dell to former Diamondback Capital Management LLC analyst Jesse Tortora from 2007 to 2009 after Tortora paid him $175,000 in “consulting” fees.
Goyal testified the illegal tips he obtained were from a friend who worked in Dell’s investor relations department.
Tortora testified earlier at Steinberg’s trial that he also shared the information Goyal provided with his analyst friends, including Horvath.
Six people charged with being part of the insider-trading ring have pleaded guilty and are cooperating with the U.S., including Horvath and Tortora. Horvath also testified in Steinberg’s trial.
SAC agreed to close its investment advisory business as part of a $1.8 billion deal announced Nov. 4 to end a criminal probe and a money-laundering suit filed by prosecutors in the office of Manhattan U.S. Attorney Preet Bharara, who has called SAC “a veritable magnet for market cheaters.”
Billionaire Steven Cohen, the founder of Stamford, Connecticut-based SAC, hasn’t been charged with a crime.
The case is U.S. v. Steinberg, 12-cr-00121, U.S. District Court, Southern District of New York (Manhattan).