Bloomberg News

Ex-SAC Analyst Dennis Is Uncharged Co-Conspirator, U.S. Says (1)

September 18, 2013

Former SAC Capital Advisors LP analyst Ron Dennis is an uncharged co-conspirator in an insider-trading scheme involving SAC portfolio manager Michael Steinberg, U.S. prosecutors said in a filing in federal court in Manhattan.

Steinberg, the long-serving portfolio manager at the Stamford, Connecticut-based fund charged in the government’s wide-ranging probe of insider trading, was indicted by prosecutors in the office of Manhattan U.S. Attorney Preet Bharara in documents unsealed on March 29. He is scheduled to go on trial on Nov. 18.

The U.S. alleges Steinberg engaged in insider trading in Dell Inc. (DELL:US) and Nvidia Corp. (NVDA:US) based on illicit tips provided to him by his analyst, Jon Horvath. The former analyst, who has pleaded guilty and is cooperating with the U.S., is scheduled to be a witness at Steinberg’s trial.

In a memo to Steinberg’s lawyers providing details on the alleged conspiracy, prosecutors said that Horvath and Dennis were part of a group of six analysts who obtained and passed nonpublic information about stocks in at least 10 other technology companies.

Guilty Plea

Assistant U.S. Attorneys Antonia Apps and Harry Chernoff said that Dennis obtained earnings information on Volterra Semiconductor Corp. (VLTR:US) and PMCS Sierra Inc. to former Diamondback Capital Management LLC analyst Jesse Tortora. Tortora has pleaded guilty to insider trading and is cooperating with the U.S.

Steinberg, who has pleaded not guilty, was one of 15 SAC portfolio managers handling technology, media and telecommunications stocks before being placed on leave in September, said a person with knowledge of the matter. He faces as long as 20 years in prison if convicted.

In July, Bharara announced a criminal indictment of the hedge fund for what he said was an unprecedented insider trading by employees dating back as far as 1999. The fund held as much as $14 billion that month and was founded by Steven A. Cohen.

The case is U.S. v. Steinberg, 12-cr-00121, U.S. District Court, Southern District of New York (Manhattan).

To contact the reporter on this story: Patricia Hurtado in New York at pathurtado@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net


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