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Former SAC Capital’s Michael Steinberg Gets 3 1/2 Years for Insider Trading View Count: 24
Five months after a federal jury convicted Steinberg on securities fraud and conspiracy charges, in a case stemming from a broad crackdown on insider trading on Wall Street, U.S. District Judge Richard Sullivan in Manhattan imposed a sentence of 3-1/2 years in prison for insider trading on Michael Steinberg, a portfolio manager at Steven A. Cohen’s SAC Capital Advisors hedge fund. According to Reuters, Michael Steinberg was sentenced on Friday. Michael Steinberg, 42, is one of eight current or former SAC Capital employees to be convicted on insider trading charges.
Insider trading refers to transactions in a company’s securities, such as stocks or options, by corporate insiders or their associates based on information originating within the firm that would, once publicly disclosed, affect the prices of such securities. Corporate insiders are individuals whose employment with the firm (as executives, directors, or sometimes rank-and-file employees) or whose privileged access to the firm’s internal affairs (as large shareholders, consultants, accountants, lawyers, etc.) gives them valuable information.
Before sentencing Michael Steinberg today in Manhattan federal court, U.S. District Judge Richard Sullivan said that “For most people on the planet, $1.8 million of gain is a lifetime of accumulated wealth.” According to Bloomberg News, the judge stated that, “Maybe in a hedge fund it’s no big deal, but it’s a lot of money to most people.”
The Guardian reported that prosecutors accused Michael Steinberg of trading on illegal tips about Dell Inc. and Nvidia Corp that were passed to him by an SAC analyst, who admitted to swapping confidential information among a group of analysts at other hedge funds.
Manhattan U.S. Attorney Preet Bharara said in a statement according to Bloomberg News that, “Michael Steinberg traded on information from company insiders at Dell and Nvidia to reap nearly $2 million in illegal profits,” and that “He has learned the steep cost of those transactions.”
It has been reported that the federal authorities have been investigating SAC for a decade. According to Time, billionaire hedge fund mogul Steven A. Cohen who remains under investigation by the FBI has never been charged with a crime. The firm has reportedly lost many of its traders in the wake of various investigations by the SEC.
Mathew Martoma, a former fund manager for SAC’s CR Intrinsic Investors unit, is to be sentenced next month in what the government called the biggest insider trading scheme in U.S. history, in terms of dollar amount, according to Bloomberg News.
Image credit: www.nypost.comFormer SAC Capital's Michael Steinberg Gets 3 1/2 Years for Insider Trading by Jaan
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