And More SAC Managers are Implicated, Though Not Yet Charged.

[ by Melanie Gretchen ]

The SEC stated in court that SAC manager Gabriel Plotkin got insider tips from convicted SAC analyst Jon Horvath.  Plotkin, 34, who's one of 10 portfolio managers focusing on consumer stocks at SAC affiliate, Sigma Capital Management, has not been accused of any wrongdoing.

SEC Findings and Allegations. From 2006 to 2011, Horvath gave 2 unidentified SAC managers nonpublic information on technology stocks - earnings for Dell Inc. and Nvidia Corp., prior to any public announcement.  The 2 tippees allegedly traded on that information, and made over $6 million in illicit profits for the Stamford, CT, hedge fund firm.  SAC fund manager Michael Steinberg was identified as a tippee in a separate court case although, to date, he has escaped any accusations of wrongdoing. 

SEC Sanctions.   Horvath, 43, of San Francisco, pled guilty and agreed to cooperate with Manhattan U.S. Attorney Preet Bharara’s office and the FBI.  At his plea hearing in September, Horvath admitted he got his nonpublic information on Dell in August 2008 and Nvidia in May 2009 from insiders at the 2 technology companies. 

If one has the impression that Plotkin and Steinberg are so far lucky not to have been accused of wrongdoing, think again.  According Anthony Sabino, a St. John’s law professor in New York, federal prosecutors are biding their time:

The fact that you haven’t heard from the U.S. Attorney’s office doesn’t bode well. They’re not jumping in on settling anything yet, which means to me that they may be keeping their options open.  In light of Horvath’s guilty plea, there was no way SAC could argue against liability.  This settlement with the SEC still leaves open all kinds of possibilities, including possible civil suits and prosecutions of others at SAC."

The case: U.S. v. Newman, 12-00121; the SEC case is SEC v. Sigma Capital, 13-01740. Both are in U.S. District Court, Southern District of NY (Manhattan).

For further details, go to [Bloomberg, 3/17/13].

To contact Melanie Gretchen: melanie@compliance-insights.com.