Wednesday, 28 September 2016
Last updated 23 sec ago
Apr 1 2013 | 10:06am ET
Michael Steinberg, the most senior current or former SAC Capital Advisors employee to be charged with insider trading, pleaded not guilty to conspiracy and securities fraud charges on Friday.
Steinberg, a close associate of SAC founder Steven Cohen, was arrested at his Manhattan apartment on Friday morning and appeared before a federal judge later that morning to plead not guilty. He was released on a $3 million bond, secured by $1 million in property.
“Michael Steinberg did absolutely nothing wrong,” his lawyer, Barry Berke, said. “Caught in the cross-fire of aggressive investigations of others, there is no basis for even the slightest blemish on his spotless reputation.”
At Friday morning's hearing, prosecutors said that SAC had not been served with a search warrant in connection with Steinberg's case. Steinberg works at the hedge fund's New York City office, in its Sigma Capital Management unit, although he has been on leave since September, when he was identified as an unindicted co-conspirator in the trial of two other hedge fund managers, both of whom were convicted.
Steinberg is accused of trading Dell Inc. and Nvidia Corp. shares based on confidential information acquired by Jon Horvath, his former analyst, from analysts at other funds, earning SAC $3.1 million in illicit profits and losses avoided. Prosecutors have cited e-mails that show Horvath asking Steinberg to remain mum about some of the information he offered.
Horvath has pleaded guilty and is cooperating with prosecutors, and SAC earlier this month agreed to pay $14 million to settle allegations stemming from trades made by Steinberg and another portfolio manager based on Horvath's tips. A larger, $602 million, settlement was also struck, relating to a different insider-trading case.
SAC also stood up for Steinberg, with a statement reading, "Mike has conducted himself professionally and ethically during his long tenure at the firm. We believe him to be a man of integrity."
If convicted, Steinberg, who has worked at SAC since 1997, faces up to 85 years in prison.