Tips flowed to Steven Cohen's 'right-hand man,' witness says

Thu Nov 21, 2013 4:55pm EST
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By Nate Raymond

NEW YORK (Reuters) - A former analyst testified Thursday how secret information traveled among members of what prosecutors have called a "corrupt circle," before making its way to SAC Capital Advisors portfolio manager Michael Steinberg, who is on trial on insider trading charges.

Steinberg is the first employee of Steven A. Cohen's SAC Capital Advisors to face trial in a decade-long government investigation of insider trading at the hedge fund.

Jesse Tortora, a former analyst at another Wall Street hedge fund, told jurors how he had swapped confidential information with other analysts, including Jon Horvath at SAC.

"He in turn passed information or communicated that information to Mike Steinberg," Tortora said.

Steinberg, 41, faces five counts of securities fraud and conspiracy to commit securities fraud on charges he traded in 2008 and 2009 in Dell Inc and Nvidia Corp based on inside information.

Prosecutors say the information came from Horvath, an analyst in the SAC division Steinberg oversaw, Sigma Capital Management.

Tortora, a former analyst at hedge fund Diamondback Capital Management, is the first of four cooperating witnesses the government plans to call in the case against Steinberg. All four have pleaded guilty to charges related to insider trading.

'CORRUPT CIRCLE'   Continued...

Former SAC Capital portfolio manager Michael Steinberg (R) arrives with his lawyer Barry Berke at the Manhattan Federal Courthouse in New York, November 21, 2013. REUTERS/Brendan McDermid