Rabbi’s SAC Source Identified

Feb 25 2010 | 12:57pm ET

The inmate at the center of a rabbi’s alleged attempted shakedown of SAC Capital Advisors has been identified.

Last week, the rabbi, Milton Balkany, was accused of trying to blackmail an unidentified hedge fund—since identified as SAC—for $4 million. According to prosecutors, Balkany told the hedge fund that he was counseling an unidentified inmate who would keep quiet about alleged insider-trading at the firm if the donations to two schools, including one headed by Balkany, were made.

That inmate is Hayim Regensberg. The 44-year-old was convicted last year of running a three-year-long Ponzi scheme and is now serving an eight-year sentence at New York’s Otisville Correctional Facility.

Balkany allegedly told SAC that Regensberg was under pressure to cooperate with the government on an insider-trading investigation of SAC. Prosecutors say that there was no such probe, and it is also unclear whether Balkany and Regensberg ever actually met.

Regensberg has not been accused of any insider-trading or wrongdoing involving this case.

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