Six Years After Crackdown, U.S. Set for Another Insider Trading Trial
Six Years After Crackdown, U.S. Set for Another Insider Trading Trial
(Bloomberg) -- Six years after his case was hailed as the centerpiece of an insider-trading crackdown against SAC Capital Advisors LP, prosecutors said Wednesday they’re ready to take a former fund manager to trial, just weeks after a federal judge tossed his guilty plea.
Richard S. Lee pleaded guilty in July 2013, days before then-U.S. Attorney Preet Bharara unveiled a sweeping indictment that alleged SAC Capital orchestrated a massive insider-trading scheme. Lee was one of at least eight SAC fund managers or analysts who were charged criminally in the government’s attack on illicit trading.
But after a series of court rulings changed the landscape of insider-trading law, Lee challenged his plea as insufficient. Last month, U.S. District Judge Paul Gardephe in Manhattan granted Lee’s request to withdraw the plea but didn’t grant his bid to be declared “innocent.”
“The law has been a moving target,” Gardephe told lawyers Wednesday. “How do you want to proceed?”
“From our perspective, we’re ready for a trial date,” Assistant U.S. Attorney Drew Skinner replied.
But Lee’s lawyer, Greg Morvillo, who successfully challenged the conviction of another fund manager that triggered the upheaval in insider-trading law, told Gardephe he will continue to fight the case, insisting he hasn’t yet received crucial evidence in the case.
“We have virtually nothing,” Morvillo said, noting he hadn’t received SAC Capital emails, instant messages, trading records or telephone calls.
Gardephe agreed to a postponement and set an Aug. 21 hearing. Morvillo declined to comment after Wednesday’s hearing.
In announcing the case Bharara said Lee had been hired by SAC Capital specifically because he had a reputation for illicit trading.
“When so many people from a single hedge fund have engaged in insider trading, it is not a coincidence,” Bharara said at the time.
SAC Capital later agreed to plead guilty to federal charges and pay a record $1.8 billion as part of a landmark deal with the U.S. It changed its name to Point72 Asset Management LP and agreed to manage the money of its billionaire founder, Steven A. Cohen.
The case is U.S. v. Lee, 13-cr-539, U.S. District Court, Southern District of New York (Manhattan).
--With assistance from Saijel Kishan.
To contact the reporter on this story: Patricia Hurtado in Federal Court in Manhattan at pathurtado@bloomberg.net
To contact the editors responsible for this story: David Glovin at dglovin@bloomberg.net, Joe Schneider
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