Ex-Neuberger Analyst Testifies He Passed Dell TipsPatricia Hurtado
Former Neuberger Berman analyst Sandeep “Sandy” Goyal told a Manhattan federal jury that he fed inside information about Dell Inc. to former Diamondback Capital Management LLC analyst Jesse Tortora from 2007 to 2009 after Tortora paid him $175,000 in “consulting” fees.
The illegal tips Goyal obtained from a friend who worked in Dell’s investor relations department were funneled to SAC Capital Advisors LP fund manager Michael Steinberg, who reaped more than $1 million by trading on the illegal tips in 2008, federal prosecutors said.
Goyal, 41, told the jury in Steinberg’s insider-trading trial that after graduating from the University of Texas with a masters degree in business administration, he worked at the Round Rock, Texas, personal computer maker. He later joined Prudential Equity Group Inc. in San Francisco, where he met Tortora and worked as his junior analyst.
In late 2007, Goyal said Rob Roy, an acquaintance from business school who worked at Dell, asked for career advice on getting a job on Wall Street. Goyal said Roy began providing him with material nonpublic information that included the company’s revenue, gross margins and operating expenses from late 2007 to 2009, usually in telephone calls. Roy hasn’t been charged with a crime.
“He wanted to work in the investment management industry,” Goyal testified. “I helped him with his resume and gave him interview tips and gave him feedback on people he was interviewing with.”
Joanna Hendon, Roy’s lawyer, said in a statement: “Rob Roy is innocent of any wrongdoing. He took Goyal’s calls at Dell because it was his job to make himself available to analysts and because he was instructed to be especially solicitous of those at the fund where Goyal worked. Goyal, for his part, is crystal-clear that he never told Rob about any insider trading scheme.”
Goyal said he secretly pleaded guilty to securities fraud and conspiracy in 2011 and agreed to work for federal investigators. He resigned from Neuberger in January 2012.
Tortora testified earlier at Steinberg’s trial that he shared the information Goyal provided with his friend, Jon Horvath, a former SAC analyst who worked for Steinberg.
Goyal was at the center of a group of hedge fund analysts who swapped inside information that they passed onto their portfolio managers to trade, the U.S. said. Two fund managers were convicted at a trial last year.
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, who testified against Steinberg.
Steinberg, 41, 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 Corp. in 2009. Steinberg, who has pleaded not guilty, is the first of eight current or former SAC employees charged by the U.S. to go to 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 the Stamford, Connecticut-based firm, 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).