Wednesday, 17 September 2014
Last updated 51 min ago
May 5 2014 | 11:33am ET
Michael Steinberg has denied the insider-trading charges he was convicted of in December. But if he is guilty of them, he shouldn’t spend more than two years in prison, his lawyers argued last week.
Barry Berke asked U.S. District Judge Richard Sullivan to impose just a two-year sentence, less than half the four-and-a-quarter to five-and-a-quarter years recommended by the district court’s probation department. Prosecutors have yet to make their recommendation on sentencing, which is set for May 16; the former SAC Capital Advisors trader faces up to 85 years in prison.
Steinberg, Berke said, “did not know about, let alone authorize, any payments to obtain illegal inside information.” Nor did he “initiate the conspiracy, which existed before he was alleged to have joined it.”
What’s more, “Mr. Steinberg is a man of many admirable individual characteristics—but more than that, he is a giver and a doer, someone whose contributions to the happiness, success and well-being of his family, friends and many others are second to none.”
Steinberg was found guilty of securities fraud and conspiracy. The jury found that he had illegally traded shares of Dell inc. and Nvidia Corp. based on confidential information acquired by his former analyst, Jon Horvath. The trades earned or saved SAC a combined $3.1 million.
Steinberg remains free on bail pending the appeal of two other hedge fund managers convicted on insider-trading. Level Global Investors co-founder Anthony Chiasson and former Diamondback Capital Management trader Todd Newman have asked the U.S. Second Circuit Court of Appeals to find that a trader must know that the source of insider information received a benefit for revealing it in order to be guilty of insider trading. The court expressed some sympathy with that argument—as well as concern that prosecutors were steering insider-trading cases to Sullivan, who has proven tough on such defendants.
The case concerns “whether the government must prove a tippee’s knowledge of the benefit conferred to the tipper,” Berke wrote. “We have confirmed with the government and they consent to the request for bail pending appeal.”
Aug 25 2014 | 11:21am ET
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