PREET’S BAD ‘SAC’
Cohen’s ex-trader aims to retract guilty plea
Preet Bharara’s credentials as the former sheriff of Wall Street are facing yet another challenge from the old gang at SAC Capital.
An ex-trader for billionaire Steve Cohen’s now-defunct hedge fund, who had flipped to cooperate with the feds in an insider-trading case, is now seeking to withdraw his 2013 guilty plea, claiming that former Manhattan US Attorney Bharara didn’t have the smoking-gun evidence against him that he claimed, court papers show.
Specifically, ex-SAC trader Richard Lee said he was preparing for his October sentencing when he received a copy of an instant message exchange he had with Cohen in 2009 which, he believes, throws the government’s entire case against him into question, according to the filing.
Lee has asked the judge to dismiss his charges or set a date for trial.
“Because of these facts, Mr. Lee cannot, in good conscience, proceed to sentencing because he now knows that he is innocent of the charges,” according to his lawyer, Greg Morvillo.
A reversal, if granted, would be a fresh blow to Bharara, who never managed to bring a case against Cohen — a reclusive Connecticut tycoon whose legendary ruthlessness inspired Showtime’s popular TV series “Billions.”
Last month, Bharara scored a victory when an appeals court upheld the conviction of ex-SAC trader Matthew Martoma in the biggest in- sider-trading case in history, which involved $275 million in ill-gotten gains.
Nevertheless, Bharara has suffered multiple setbacks in his battle with SAC — thanks to a 2014 appeals court ruling that significantly narrowed the definition of insider trad- ing. That has led to the convictions of nine Wall Streeters getting reversed, including SAC portfolio manager Michael Steinberg, his tech analyst Jon Horvath, and Level Global co-founder Anthony Chiasson.
Central to Lee’s motion, filed late Friday, is an instant message he sent to Cohen about an impending partnership between Yahoo and Microsoft in 2009.
The IM, which Lee only received ahead of his sentencing, allegedly shows that he talked with Cohen about the Yahoo-Microsoft merger at 9:13 am on July 10, 2009 — roughly two hours before the feds say he received material, non-public information about the tech deal from a Wall Street analyst.
The analyst, Sandeep Aggarwal, pleaded guilty in 2013 to passing on confidential information about the YahooMicrosoft tie-up after confirming it with a friend who worked at Microsoft.
With the newly discovered IM exchange, Lee now argues he heard scuttlebutt about the partnership well before he spoke with Aggarwal — and that he started buying Yahoo shares on those rumors, and not on illegal insider information.
Lee also is contesting a separate trade — a planned acquisition of tech company 3Com — on the same legal grounds that reversed the convictions of his peers, Steinberg and Horvath.
A spokesman for the Manhattan US Attorney’s office declined to comment. Bharara did not respond to a request for comment.