Michael Steinberg, a portfolio manager at Steve Cohen’s SAC Capital Advisors hedge fund, was sentenced on Friday to 3½ years in prison for insider trading.
The sentence was imposed by U.S. District Judge Richard Sullivan, five months after a jury convicted Steinberg on securities fraud and conspiracy charges, stemming from a broad crackdown on Wall Street insider trading.
Steinburg’s lawyers requested a two-year prison while prosecutors asked for as much as a 6½ year sentence.
Sullivan also ordered Steinburg to pay a $2 million fine and forfeit $365,142, which represents the payment Steinburg and his analyst received as profit on the insider trading according to the government. Steinberg is expected to appeal the conviction and was granted bail.
Steinberg was accused by prosecutors of trading on illegal tips about Dell and Nvidia passed to him by an SAC analyst, who admitted to swapping confidential information among a group of analysts at other hedge funds.
Steinburg, 42, is one of eight current or former SAC Capital employees to be convicted on insider trading charges, and only one of two to go on trial.
SAC pleaded guilty to fraud charges and agreed to pay $1.8 billion in criminal and civil settlements.
The Stamford, Connecticut-based firm has rebranded itself as Point72 Asset Management as it shifts to being a family office managing Cohen’s fortune. Cohen has not been criminally charged.
Sullivan at Friday’s hearing:
“If it were only based on the character of this man, it would be easy, because I do think this is a good man. But I do have to consider the crime here.”
The appeal is expected to focus on Sullivan’s not having required the government to prove that Steinberg knew the insider who originally disclosed non-public information received a benefit for making the disclosure.
Todd Newman, a former portfolio manager at Diamondback Capital Management and Anthony Chiasson, co-founder of Level Global Investors, are appealing their similar convictions in a separate trial that Sullivan also oversaw.
The case is U.S. v. Steinberg, U.S. District Court, Southern District of New York, No. 12-cr-00121.