* Voluminous evidence includes court-authorized wiretaps
* Sept 24 next court date
By Bernard Vaughan
NEW YORK, July 26 Steven Cohen's hedge fund, SAC
Capital Advisors LLP, pleaded not guilty in federal court on
Friday, one day after it was indicted on insider-trading
The firm's general counsel, Peter Nussbaum, flanked by five
defense lawyers, entered the plea before U.S. District Judge
Laura Taylor Swain in New York.
U.S. prosecutors on Thursday charged the $14 billion hedge
fund with presiding over a culture where employees flouted the
law and were encouraged to tap their personal networks for
inside information about publicly traded companies.
Government-obtained evidence includes "court-authorized
wiretaps" and "a large number of electronic recordings," such as
emails and instant messages, Antonia Apps, an assistant U.S.
attorney who has prosecuted other insider-trading cases, told
"In short, a tremendous volume," Apps said of the evidence.
Apps also said that the government would provide the bulk of
its evidence to SAC within 30 days.
Ted Wells, a lawyer representing SAC Capital, said he was
"most concerned" with obtaining statements that former SAC
Capital employees gave to the government. Wells, who said he has
had discussions with prosecutors, told the judge the defense was
entitled to the evidence as it prepares its case.
Apps said it was not clear that the statements would have to
be turned over to SAC lawyers.
Wells did not name anyone, but several former employees,
including Noah Freeman, Jon Horvath, Donald Longueuil and Wesley
Wang, have already pleaded guilty to charges of criminal insider
trading. No criminal charges have been brought against Cohen.
Swain did not decide the issue but set a Sept. 24 court date
to discuss evidence.
SAC's illegal practices ran roughly from 1999 to 2010,
according to the indictment. SAC and various affiliates were
charged with four criminal counts of securities fraud and one
count of wire fraud.
Prosecutors also filed a civil case seeking forfeitures and
money laundering penalties.
The charges came a week after the U.S. Securities and
Exchange Commission charged Cohen in a civil case with failing
to supervise two employees, Mathew Martoma and Michael
Steinberg. Both men have pleaded not guilty to criminal insider
trading charges and face trials in November.
Prosecutors are expected to ask the SEC to stay those
proceedings while it pursues the criminal case.
The main victims of SAC's alleged crimes are "large
companies...whose confidential information was stolen and traded
upon," Arlo Devlin-Brown, another assistant U.S. attorney, told
Suspect trades mentioned in the indictment include Cohen's
August 2008 sale of a $12.5 million stake in Dell Inc,
within 10 minutes after receiving an email warning that someone
at the computer maker had said the company's earnings would
SAC's lawyers on Friday included: Wells, Daniel Kramer and
Michael Gertzman of Paul, Weiss, Rifkind, Wharton & Garrison;
and Martin Klotz and Michael Schachter of Wilkie Farr &
Jonathan Gasthalter, a spokesman for SAC, declined to