Newspaper article International New York Times

Witness in SAC Trial Admits an Omission

Newspaper article International New York Times

Witness in SAC Trial Admits an Omission

Article excerpt

Jon Horvath, the government's main witness in the trial of his boss at SAC Capital Advisors, conceded that he never told his superior that the data he passed along was illicit insider information.

For days, Jon Horvath has testified at the insider trading trial of his former boss, a onetime top hedge fund executive, that he was pressured to obtain confidential corporate information to do his job.

But on Thursday, Mr. Horvath, a former analyst, conceded that he never explicitly told his superior, Michael S. Steinberg of SAC Capital Advisors, that the data he had obtained about Dell's financial results in 2008 was illicit insider information.

"No, I never told Mike Steinberg explicitly that it was illegal information," Mr. Horvath testified.

The admission came in yet another day of cross-examination in a New York federal courtroom, with Mr. Steinberg's defense lawyer again seeking to undercut the credibility of the government's top witness.

At issue is federal prosecutors' contention that Mr. Steinberg made about $1 million by trading on illegally obtained confidential information about Dell and the graphics chip maker Nvidia. Mr. Horvath, who is cooperating with the government in an effort to obtain a lenient sentence, has said that he conveyed ill-gotten information about the two companies to his boss to help make profitable trades in their stocks.

The trial is taking place weeks after SAC, which was founded by the billionaire Steven A. Cohen, pleaded guilty to securities fraud and agreed to pay $1.2 billion in fines and to stop managing money for outside investors. Mr. Cohen has not been charged criminally but faces a civil administrative action that accuses him of failing to properly supervise his hedge fund's employees.

The sometimes testy exchanges on Thursday between Mr. Horvath and the main defense counsel, Barry H. Berke, often homed in on the wording of specific phrases in an array of emails. Behind the legal assault was Mr. …

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