Sunday, 1 February 2015
Last updated 2 days ago
Dec 18 2013 | 4:28pm ET
Michael Steinberg, the highest-ranking SAC Capital Advisors employee to face criminal insider-trading charges, has been convicted of them.
A federal jury in Manhattan found Steinberg, a portfolio manager at SAC, guilty of all five charges against him—four of securities fraud and one of conspiracy. Steinberg faces up to 85 years in prison when he is sentenced.
It took the panel of nine women and three men less than two days to render their verdict. The verdict was delayed briefly after Steinberg fainted just prior to the delivery of the jury's decision.
U.S. District Judge Richard Sullivan sent the jury out of the courtroom as Steinberg was checked out, including by his brother, who is a doctor. "I think I'm OK," Steinberg said.
Steinberg's conviction following a four-week trial continues prosecutors' unbroken winning streak; to date, everyone charged in the government's recent insider-trading crackdown to face a jury has been convicted. Dozens of others have pleaded guilty, including the four cooperating witnesses to testify against Steinberg.
Steinberg was accused of trading shares of Dell Inc. and Nvidia Corp. based on confidential information acquired by his former analyst, Jon Horvath. The trades allegedly earned or saved SAC a combined $3.1 million.
Horvath was the government's star witness and withstood a prolonged cross-examination during nine days on the stand. He served as the link between Steinberg and an insider-trading ring composed of hedge fund analysts and corporate insiders, who allegedly shared tips with each other and their bosses.
Steinberg's lawyer argued that Horvath had withheld the sources of his information from the defendant, and was now lying to save his own skin. Prosecutors pointed to a number of e-mails that indicated that Steinberg knew at least some of Horvath's information was confidential.
Steinberg's conviction comes just over a month after SAC itself pleaded guilty to insider-trading charges, agreeing to return all outside capital and pay $1.2 billion in fines, and just a few weeks before a second SAC insider-trading trial, that of former portfolio manager Mathew Martoma, is set to begin.
Jan 23 2015 | 1:00pm ET
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