SAC Analyst Pleads Guilty, Could Testify In Level Global Founder's Trial

Sep 28 2012 | 2:53pm ET

A former analyst at SAC Capital Advisors has pleaded guilty to insider-trading charges, just a month before he was set to go to trial with two alleged co-conspirators.

Jon Horvath became the sixth person to plead guilty in the case, in which U.S. Attorney Preet Bharara has said a "criminal club" shared confidential tips about technology companies and illegally traded their stocks. The scheme allegedly produced some $62 million in illicit profits.

Horvath's plea comes after his former boss at SAC, Michael Steinberg, was identified in the press as an unindicted co-conspirator in the case. Horvath, who covered technology stocks at SAC's Sigma Capital Management unit, has agreed to cooperate with prosecutors; it is unclear if authorities are pursuing criminal charges against Steinberg.

At his plea hearing today in Manhattan federal court, Horvath said he received confidential tips about Dell Inc. and Nvidia Corp. and "provided the information to the portfolio manager I worked for and we executed trades in stock based on that information." Horvath did not name Steinberg in his allocution and did not specify whether Steinberg knew the information he provided was confidential.

As part of his cooperation agreement, Horvath has agreed to testify against his former co-defendants, Level Global Investors co-founder Anthony Chiasson and former Diamondback Capital Management trader Todd Newman. It is unclear if prosecutors plan to call him.

Horvath faces up to 20 years in prison on the conspiracy and securities fraud charges. The Swedish citizen could also be deported after his release from prison, if he is sent to jail. He is likely to face far less time in prison than the maximum due to his cooperation.

Neither SAC nor Steinberg have been accused of any wrongdoing.

"Until today, Mr. Horvath maintained he had not violated the law and we gave him the benefit of the presumption of innocence," SAC said. "We are disappointed and angered to learn Mr. Horvath admittedly violated the law and SAC's policies forbidding insider trading. We expect our employees to have integrity, play by the rules and follow the letter and spirit of the law."

"I was part of a group of analysts who agreed to obtain and share information about public companies," Horvath said today. "Some of the information I received was material, non-public information that I knew came from public company employees and I knew they were not permitted to share with outsiders."


In Depth

Kettera Q&A: The Advantages of Alternative Investment Platforms

Oct 28 2016 | 5:52pm ET

The past several years have seen a distinct push towards easier and cheaper access...

Lifestyle

Midtown's Plaza District Fades As Manhattan Office Landscape Shifts

Nov 22 2016 | 6:32pm ET

Lower leasing costs, more efficient office space and the hope of projecting an image...

Guest Contributor

Nowhere to Hide: Why the Future of Asset Management Depends on Innovation

Nov 15 2016 | 6:55pm ET

Information technology has reshaped the asset management industry’s periphery,...

 

From the current issue of

Chicago-based independent futures brokerage and clearing firm R.J. O’Brien & Associates (RJO) has hired industry veteran Daniel Staniford as Executive Director, responsible for the firm’s institutional business development in New York and London.

AVAILABLE NOW at BARNES & NOBLE

NEWSTAND LOCATOR