Michael Steinberg, a former portfolio manager at SAC Capital Advisors, was sentenced to 3-1/2 years in prison for insider trading in federal court on Friday. SAC Capital Advisors was a disgraced hedge fund managed by Steven A. (Stevie) Cohen.
The sentence read out by U.S. District Judge Richard Sullivan in his Manhattan courtroom, where a jury convicted Steinberg on securities fraud and conspiracy charges almost six months ago.
Steinberg received a compromise sentence, as his lawyers had pled for a two-year prison sentence, but prosecutors had pushed for a 6-1/2 year term.
The sentence also included paying a $2 million fine and forfeiting $365,142 in illegal profits. Steinberg is planning to appeal the conviction and was granted bail after the sentencing.
Steinberg accused of trading on illegal tips
The charges in the case accused Steinberg of trading on illegal tips about Dell Inc. (NASDAQ:DELL) and NVIDIA Corporation (NASDAQ:NVDA) given to him by a former SAC analyst. The analyst also admitted to swapping confidential information with an informal group of hedge fund analysts.
Steinberg is now the eighth current or former SAC Capital employee who has been convicted on insider trading charges, but one of only two two who chose to go to trial instead of copping a plea.
The firm SAC Capital pleaded guilty to fraud charges and agreed to disgorge $1.8 billion in both civil settlements and criminal penalties. Fund manager Cohen has not been charged with any crimes.
Statement from the judge
Judge Sullivan highlighted that Steinberg was not a bad person, but he had to consider the public interest involved in this kind of crime. “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.”
SAC Capital re-branded as Point72 Asset Management
In the aftermath of all the criminal charges and related unsavory news over the last several years, the Stamford, Connecticut-based SAC Capital re-branded itself as Point72 Asset Management. The renaming was undertaken both to leave behind the bad publicity and as a part of its transition to a private family office managing Cohen’s fortune instead of a public hedge fund.