SAC's Steinberg gets 3½-year sentence for insider tradingReprints
(Reuters) — Michael Steinberg, a portfolio manager at Steven A. Cohen's SAC Capital Advisors hedge fund, was sentenced on Friday to 3-1/2 years in prison for insider trading.
The sentence was imposed by U.S. District Judge Richard Sullivan in Manhattan, five months after a federal jury convicted Mr. Steinberg on securities fraud and conspiracy charges, in a case stemming from a broad crackdown on insider trading on Wall Street.
Mr. Steinberg's lawyers had asked for a two-year prison sentence, while prosecutors had argued for up to 6-1/2 years.
Judge Sullivan also ordered Mr. Steinberg to pay a $2 million fine and forfeit $365,142. The latter amount represents the total the government says was paid to Steinberg and his analyst from profits earned on the insider trading. Mr. Steinberg is expected to appeal the conviction and was granted bail.
Prosecutors accused Mr. Steinberg of trading on illegal tips about Dell Inc. and Nvidia Corp. passed to him by an SAC analyst, who admitted to swapping confidential information among a group of analysts at other hedge funds. Dell is no longer publicly traded.
Mr. Steinberg, 42, is one of eight current or former SAC Capital employees to be convicted on insider trading charges, and only one of two to go to trial.
SAC pleaded guilty to fraud charges and has agreed to pay $1.8 billion in criminal and civil settlements.
The Stamford, Connecticut-based firm has rebranded itself Point72 Asset Management as it shifts to being a family office managing Mr. Cohen's fortune. Mr. Cohen has not been criminally charged.
Judge Sullivan said at Friday's hearing that he received many letters supporting leniency for Mr. Steinberg.
“If it were only based on the character of this man, it would be easy, because I do think this is a good man,” he said. “But I do have to consider the crime here.”
The appeal is expected to focus on Judge Sullivan's not having required the government to prove that Mr. Steinberg knew the insider who originally disclosed non-public information had received a benefit for making the disclosure.
Todd Newman, a former portfolio manager at Diamondback Capital Management, and Anthony Chiasson, co-founder of Level Global Investors, are appealing their convictions on similar grounds in a separate trial that Judge Sullivan also oversaw.