United States District Court, S.D. New York
For The United States: United States Attorney Preet Bharara and Assistant United States Attorneys Antonia Apps and Harry Chernoff, United States Attorney's Office, New York, New York.
For Defendant: Barry Berke, Eric Tirschwell, Megan Ryan, Robin Wilcox, and Steven Sparling of Kramer Levin Naftalis & Frankel, LLP, New York, New York.
RICHARD J. SULLIVAN, United States District Judge.
On March 31, 2013, Defendant Michael Steinberg was indicted on one count of conspiracy to commit securities fraud and four counts of securities fraud, all relating to insider trading in Dell, Inc. (" Dell" ) and NVIDIA Corp. (" NVIDIA" ) stock from 2007 through 2009. (Doc. No. 230.) On December 18, 2013, after a four-week trial, a jury convicted Defendant on all five counts. Now before the Court is Defendant's motion for acquittal under Rule 29 of the Federal Rules of Criminal Procedure. For the reasons set forth below, the motion is denied.
Defendant, who was a portfolio manager at the hedge fund SAC Capital Advisors (" SAC" ) (Trial Tr. at 69:10-19), obtained inside information from Dell and NVIDIA through long and convoluted chains of tippers.
For the Dell information, Rob Ray (" Ray" ), a Dell employee assigned to the company's investor relations department, tipped confidential Dell information to a friend, Sandeep Goyal (" Goyal" ). (Trial Tr. at 3003:3-6, 3014:8-15, 3019:1-3020:1, 3030:11-3034:16.) In exchange, Goyal provided career advice and references to Ray, who hoped to move into the financial industry. ( Id. at 3015:10-3029:2, 3036:10-19.) Goyal then tipped the information to Jesse Tortora (" Tortora" ), a securities analyst, in exchange for money. ( Id. at 3003:3-6, 3035:9-3036:9, 3037:10-14.) Tortora in turn shared the information with a group of analyst friends as part of a general exchange of securities tips among the friends. ( Id. at 171:5-172:6, 185:20-186:19.) One of those friends was Jon Horvath (" Horvath" ) ( id. at 171:18-20), who worked for Defendant at SAC ( id. at 882:6-18). Horvath gave the information to Defendant ( id. at 929:15-930:5), who subsequently earned $1,469,593 for his portfolio by trading in Dell securities (Government Trial Exhibit (" GX" ) 51; GX 59; GX 2505; GX 2505-C).
The NVIDIA information followed a similar route. Chris Choi (" Choi" ), an employee of NVIDIA, tipped confidential NVIDIA information to his family friend Hyung Lim (" Lim" ) in order to help Lim trade in NVIDIA securities. (Trial Tr. at 3204:22-3205:5, 3217:11-19, 3218:1-3219:1, 3219:18-3220:3.) Lim in turn provided the information to his friend Danny Kuo (" Kuo" ) ( id. at 3217:11-21), partly because they were friends and partly in exchange for payments and stock tips ( id. at 3213:11-14, 3215:23-25, 3227:9-3230:7). Kuo was a member of Tortora's circle of analyst friends ( id. at 171:18-172:6), and through the circle he shared the information with Horvath ( id. at 1244:12-13, 1251:17-1253:2). Again, Horvath shared the information with Defendant ( id. at 1301:13-22), who subsequently earned $349,756 for his portfolio by trading in NVIDIA securities ( id. at 3299:25-3300:13; GX 81).
B. Procedural Background
Defendant made his Rule 29 motion at the close of the government's case. (Trial Tr. at 3385:24-3387:9.) After hearing arguments from the parties, the Court reserved judgment on the motion. ( Id. at 3402:4-3411:11.) At Defendant's request, the Court extended the deadline for post-trial briefing until February 3, 2014 (Doc. No. 333), but Defendant ultimately decided not to file any additional submissions.
II. Legal Standard
A. Rule 29
Rule 29(a) requires the court to " enter a judgment of acquittal of any offense for which the evidence is insufficient to sustain a conviction." Fed. R. Crim. P. 29(a). Where the court reserves judgment until after the jury returns a verdict, it must still " decide the motion on the basis of the evidence at the time the ruling was reserved." Fed. R. Crim. P. 29(b). " A defendant challenging a conviction based on
insufficient evidence bears a heavy burden." United States v. Aina-Marshall, 336 F.3d 167, 171 (2d Cir. 2003). " [T]he relevant question is whether, after viewing the evidence in the light most favorable to the prosecution, any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt." Jackson v. Virginia, 443 U.S. 307, 319, 99 S.Ct. 2781, 61 L.Ed.2d 560 (1979). In this analysis, the court does not assess witness credibility, resolve inconsistent testimony against the verdict, or otherwise weigh the significance of the evidence. See United States v. Autuori, 212 F.3d 105, 114 (2d Cir. 2000). Further, the court is to apply this test to " the totality of the government's case and not to each element, as each fact may gain color from others." United States v. Guadagna, 183 F.3d 122, 130 (2d Cir. 1999). " [T]he court may enter a judgment of acquittal only if the evidence that the defendant ...