More than 80 fund managers, analysts, lawyers and insiders at public companies have been convicted of insider trading in cases brought by the Manhattan U.S. Attorney’s office and the Federal Bureau of Investigation in New York since August 2009.
Since the government’s crackdown on illegal trading at hedge funds was begun, at least nine current or former SAC employees were tied by U.S. authorities to insider trading. Of the five former SAC employees who’ve pleaded guilty, three are cooperating with the U.S.
Portfolio Manager
The U.S. today acknowledged the increasing number of SAC- related defendants as the sprawling insider probe progressed, pointing to “systematic insider trading by the SAC entity defendants resulting in hundreds of millions of dollars of illegal profits and avoided losses at the expense of members of the investing public.”
One of those who has pleaded guilty is former SAC portfolio manager Noah Freeman, who told the FBI that it was “understood” at SAC that “providing Cohen with your best trading ideas involved providing Cohen with inside information.”
At one point in his career at SAC, Freeman, who worked in the firm’s Boston office, said he sat next to Cohen.
“Freeman pitched to Cohen many trading ideas over the 18 months he was at SAC and some of the trading ideas involved dirty information,” according to a memo written by FBI Agent B.J. Kang.
Horvath was one of eight analysts and portfolio managers charged in January 2012 with being part of what Bharara described as “a tight-knit circle of greed” whose members trafficked in confidential information from 2007 to 2009. Six of those charged in the case have pleaded guilty to insider trading and have agreed to cooperate with the U.S.
Quiet Culture
In today’s indictment, the government said that Cohen “fostered a culture that focused on not discussing inside information too openly, rather than not seeking or trading on such information in the first place.”