U.S. seeks more than 6 years in prison for SAC's SteinbergReprints
(Reuters) — U.S. prosecutors are urging a federal judge to impose a sentence of up to 6½ years in prison for Michael Steinberg, a portfolio manager at Steven A. Cohen's SAC Capital Advisors convicted last year on insider trading charges.
In a filing late on Friday in New York federal court, prosecutors argued Mr. Steinberg should be sentenced up to a year more than what the court's probation office had called appropriate, based on trading the government said Cohen conducted at his employee's recommendation.
"The fact the government did not allege that Cohen was a coconspirator at trial, and argued that Cohen's trading was irrelevant to the crimes charged in the indictment, is of no moment here," the government said in the filing.
The government said U.S. District Judge Richard Sullivan should sentence Mr. Steinberg to 5¼ to 6½ years in prison and order him to forfeit $365,142.
Steinberg's lawyers earlier this month requested a sentence of two years in prison. Barry Berke, a lawyer for Mr. Steinberg, declined to comment on Monday on the prosecutor's sentencing recommendations filing.
Mr. Steinberg, who is scheduled to be sentenced Friday, was found guilty in December on five counts of conspiracy and securities fraud.
Prosecutors accused Mr. Steinberg, 42, of trading on confidential information about Dell Inc. and Nvidia Corp. passed to him by an SAC analyst who swapped illegal tips with friends at other firms.
He is one of eight current or former employees of SAC Capital to be convicted for insider trading. SAC Capital itself also pleaded guilty to fraud charges and has agreed to pay $1.8 billion in criminal and civil settlements.
SAC Capital recently rebranded itself Point72 Asset Management as it shifted toward being a so-called family office managing mostly Mr. Cohen's own fortune. A spokesman for Point72 did not respond to a request for comment Monday.
Mr. Cohen has not been criminally charged. But the U.S. Securities and Exchange Commission has launched an administrative action to bar him from the securities industry for failing to supervise two portfolio managers including Mr. Steinberg and prevent insider trading. Mr. Cohen denies wrongdoing.
In their motion Friday, prosecutors argued that in sentencing Mr. Steinberg, Judge Sullivan should attribute to him $1.83 million in losses they alleged Mr. Cohen avoided by selling Dell stock at Mr. Steinberg's recommendation in August 2008.
Doing so would add to the $1.82 million that Mr. Steinberg personally made in his own portfolio thanks to insider information and, under federal sentencing guidelines, result in a higher sentence than the 4¼ to 5¼ years in prison the probation office recommended, prosecutors said.
Mr. Steinberg's lawyers are also seeking to have their client remain out on bail pending appeal in light of a related case pending at the 2nd U.S. Circuit Court of Appeals.
The 2nd Circuit is considering whether to be convicted of insider trading, the recipient of nonpublic information must know that the source of the tip benefited from the disclosure.
The case is U.S. v. Steinberg, U.S. District Court, Southern District of New York, No. 12-cr-00121.