Sunday, 26 June 2016
Last updated 2 days ago
Dec 10 2013 | 1:29pm ET
Former SAC Capital Advisors analyst Jon Horvath's grilling isn't over yet.
Horvath, who is testifying against his former boss, SAC portfolio manager Michael Steinberg, will face a fifth day of cross-examination today. Steinberg's lawyer, Barry Berke, had initially planned to wrap up his questioning of the government's star witness yesterday.
But, yesterday, Berke asked U.S. District Judge Richard Sullivan for permission to read to the jury a transcript of a phone call between Horvath and Spyridion Adondakis, an analyst at Level Global Investors who has admitted to being part of Horvath's insider-trading ring. During the call, recorded in November 2010, Horvath tells Adondakis that another alleged source, expert-network analyst John Kinnucan, told Steinberg that he wasn't feeding the trader inside information.
Steinberg called Kinnucan after the analyst had sent an e-mail to clients, including Steinberg, telling them he'd met with the Federal Bureau of Investigation as part of their insider-trading probe, but had refused to cooperate. Kinnucan failed to hide the recipients of the e-mail, which quickly made its way into the media.
Steinberg was furious about the e-mail, Berke told Sullivan, citing Horvath's call with Adondakis, who was recording the conversation for the FBI.
"Mr. Steinberg is on the phone with Kinnucan and said, 'Is this inside information you're telling me?' and Kinnucan is like, 'No, I swear Mike, it's not.'" Berke said, paraphrasing the transcript. Prosecutor Antonia Apps, who said the transcript should not be read because it is hearsay, added that Horvath told Adondakis that Steinberg had yelled at Kinnucan and "made him cry."
Berke argued that the call demonstrates Steinberg's "consciousness of innocence," but Sullivan said he was not likely to allow its admission.
"It looks to me like it's far afield and also hearsay," he said, adding that he would rule today.
None of the charges against Steinberg stem from his relationship with Kinnucan, who had pleaded guilty to insider trading.
Berke did ask some questions of Horvath in front of the jury yesterday. Horvath admitted that he "never told Mike" that his Nvidia source worked in that company's accounting department. Horvath earlier testified that he never explicitly told Steinberg that his Dell source was inside that company.
Berke also pounded Horvath on his failure to pass a tip about Nvidia to Steinberg in 2009. Horvath and Steinberg spoke on that day, but the former did not tell the latter anything about Nvidia. Steinberg traded on the stock that day anyway.
"I think I was in Taiwan and didn't see this at the time," Horvath said of the tip. "It was difficult to do in my sleep."