Arguably the most high-profile hedge-fund insider-trading trial since that of Galleon Group founder Raj Rajaratnam opens today.
Jury selection kicks off the trial of SAC Capital Advisors portfolio manager Michael Steinberg in New York federal court. Steinberg is accused of trading two technology stocks based on confidential information he received from his analyst.
That analyst, Jon Horvath, is cooperating with prosecutors and will testify against Steinberg. Prosecutors plan to open their case with SAC CFO Daniel Berkowitz, and may even seek to call SAC founder Steven Cohen.
Steinberg's lawyers plan to argue that he did not know that the information he got from Horvath was confidential.
Steinberg, who is on leave, is the highest-ranking SAC employee to be charged in the insider-trading crackdown--although SAC itself pleaded guilty to criminal charges earlier this month--and a personal friend of Cohen's. He is accused of earning the firm $3.1 million trading shares of Dell Inc. and Nvidia Corp., and faces up to 85 years in prison if convicted.
The trial, before U.S. District Judge Richard Sullivan, is expected to last up to four weeks.