For days, Jon Horvath has testified at the insider trading trial of his former boss, a onetime top hedge fund executive, that he was pressured to obtain confidential corporate information to do his job.
But on Thursday, Mr. Horvath, a former analyst, conceded that he never explicitly told his superior, Michael S. Steinberg of SAC Capital Advisors, that the data he had obtained about Dell Inc.’s financial results in 2008 was illicit insider information.
“No, I never told Mike Steinberg explicitly that it was illegal information,” Mr. Horvath testified.
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VideoThe admission came after yet another day of cross-examination in a Manhattan federal courtroom, with Mr. Steinberg’s defense lawyer again seeking to undercut the credibility of the government’s top witness.
At stake is federal prosecutors’ contention that Mr. Steinberg made about $1 million by trading on illegally obtained confidential information about Dell and the graphics chip maker Nvidia. Mr. Horvath, who is cooperating with the government in an effort to obtain a lenient sentence, has said that he conveyed ill-gotten information about the two companies to his boss to help make profitable trades in their stocks.
The trial is taking place weeks after SAC, which was founded by the billionaire Steven A. Cohen, pleaded guilty to securities fraud and agreed to pay $1.2 billion in fines and to stop managing money for outside investors. Mr. Cohen has not been charged criminally but faces a civil administrative action that accuses him of failing to properly supervise his hedge fund’s employees.
The sometimes testy exchanges on Thursday between Mr. Horvath and the main defense counsel, Barry H. Berke, often homed in on the wording of specific phrases in an array of emails. Behind the legal assault was Mr. Berke’s effort to portray Mr. Horvath as an untrustworthy character who hid the nature of his own crimes from his boss and repeatedly lied on the stand.
Mr. Horvath sometimes appeared flustered on the stand, often asking Mr. Berke to repeat questions or providing long answers to short inquiries. During one particularly tough stretch of questioning, the presiding judge, Richard J. Sullivan of the Southern District of New York, gently reminded the two that they were not holding a private conversation but an exchange before a jury.
At one point, Mr. Horvath admitted that he may not have sent one email from the living room of his vacation house in Mexico, but instead from the airport. Still, he argued, while he may not have remembered the specifics of that message, he regularly communicated with Mr. Steinberg during that trip.
Mr. Berke also pressed the witness on the wording of emails describing communications with Jesse Tortora, another hedge fund analyst who was the source of the Dell tips. The defense lawyer repeatedly argued that Mr. Horvath had tried to obscure the illicit nature of Mr. Tortora’s information, passing it off as coming from legitimate channels like the computer company’s investor relations department.
Mr. Horvath repeatedly said that he had done no such thing.
At other times, Mr. Berke tried to show that his client was not dependent solely on Mr. Horvath’s tips and analysis, reading from emails in which Mr. Steinberg wrote of seeking input from other analysts and hedge fund managers. The implication was that Mr. Steinberg had made up his own mind about how to trade Dell shares, including deciding to bet against them soon before the company reported weaker-than-expected earnings.
Mr. Berke’s cross-examination of Mr. Horvath is expected to continue for several hours on Monday before the prosecution conducts one last round of questioning. The government told Judge Sullivan it hoped to rest its case by the end of next week.