Former SAC portfolio manager Donald Longueuil has just pled guilty to charges of insider trading (before the (in)famous Judge Jed Rakoff) in Federal District Court in Manhattan. Dealbook reports: "Mr. Longueuil described in court how after reading news reports about the government’s insider trading last fall he destroyed his hard drive that contained incriminating evidence. The government, however, dropped its obstruction of justice charge against Mr. Longueuil. Under the plea agreement with the government, Mr. Longueuil faces a prison sentence between 46 months to 57 months. Judge Rakoff could depart from those guidelines." And he certainly will if Longueuil, who is a cooperating witness, drops some juicy bombs about every DA's public enemoy number one: ole Crown Lane, Greenwich residing blue eyes himself.
Neither SAC nor its founder, Steven A. Cohen, has been accused of any wrongdoing. The firm denounced the conduct of Mr. Longueuil and Mr. Freeman at the time of his arrest.
Oddly enough, this reminds us of the actions taken by Berkshire last night, which decided to throw the book at the man who was soon to be its next head. Funny how that happens.
At Thursday’s hearing, Mr. Longueuil, accompanied by his lawyer Craig Carpenito, pleaded guilty to trading in Marvell Technology stock based on an illegal tip provided to him by Mr. Barai. According to court filings, the source of that original tip was Winifred Jiau, a former employee of Primary Global Research, a so-called expert network firm. Ms. Jiau has pleaded not guilty to conspiracy charges.
Of course, we can't wait for the apologists to come up with the argument that should a criminal case be brought up against SAC, that half the liquidity in the NYSE will plunge since it comes exclusively from Cohen's minions buying and selling biotech companies, supposedly almost exclusively ahead of Phase II and III trial results... with absolutely no knowledge of the outcome in advance, of course.