A judge refused on Wednesday to delay the insider-trading trial of SAC Capital Advisors portfolio manager Michael Steinberg, brushing aside Steinberg’s concerns over the media frenzy surrounding his employer’s recent guilty plea.
In a brief order, U.S. District Judge Richard Sullivan in Manhattan denied a request by Steinberg’s lawyers for a three-month adjournment of the trial, which is slated to begin on Monday. Sullivan wrote that he “agrees that the amount of publicity surrounding this case risks prejudicing the jury,” but that the risk can be mitigated by questioning prospective jurors about their knowledge of SAC’s legal troubles, including the Nov. 4 announcement of its plea deal with the Department of Justice.
“The court is doubtful … that a three-month adjournment would be helpful in addressing that publicity. Even assuming that the public is forgetful enough to be affected by a three-month delay, there is a strong likelihood that this and related cases will be still be in the news three months from now,” Sullivan wrote. “As it has done in previous cases, the Court will individually question, outside of the presence of other jurors, any juror who has been exposed to any publicity regarding this or any related case.”
The Southern District of New York U.S. Attorney’s Office announced earlier this month that SAC would plead guilty to insider trading and pay a $1.2 billion settlement, which comes on top of a $616 million settlement with the U.S. Securities and Exchange Commission in March. The DOJ has individually charged several SAC employees with insider trading, though the hedge fund’s namesake and leader, Steven Cohen, isn’t one of them. Of the individual SAC employees targeted by DOJ, Steinberg is the most senior. A subordinate, Jon Horvath, will be a key government witness at trial.
Steinberg’s defense lawyer, Barry Berke of Kramer Levin Naftalis & Frankel, has long complained about prejudicial media coverage, which he attributes in large part to public statements by prosecutors.
In a July 9 motion, Berke asked Sullivan to quiz prospective jurors about what they’d read or heard about the case. Then, in an Oct. 22 letter to his opposing counsel at the U.S. attorney’s office, Berke requested that a plea agreement with SAC “not include the kinds of inflammatory, sweeping and individual guilt-assuming quotations, statements and demonstrative aids that the Office publicized when the SAC indictment was first announced.”
The DOJ disagreed with Berke’s characterization, stating that it has a duty to keep the public informed about its cases. (You can read the exchange of letters on pages 164-170 of this court filing.)
SAC’s guilty plea is unlikely to be admissible evidence at Steinberg’s trial, as we explained here.