A federal judge Friday sentenced Michael Steinberg, a former portfolio manager for SAC Capital, to 42 months in prison following his conviction for insider trading.
US Judge Richard Sullivan imposed a sentence longer than the 24 months sought by Steinberg`s attorneys, but shorter than the 63-78 months prosecutors had argued for.
A New York jury in December convicted Steinberg after concluding he garnered some $1.9 million in illegal profits through insider information about Dell and other technology companies that was relayed to SAC through a chain of business contacts, some of whom received money for the tips.
One of eight ex-SAC employees now convicted of insider trading, Steinberg was close to SAC founder Steven A. Cohen, whose firm in November pleaded guilty to insider trading and paid $1.8 billion in penalties. Cohen has not been charged criminally.
SAC has since been renamed Point72 Asset Management, and is barred under a settlement with authorities from trading on behalf of clients. Instead, it will oversee Cohen's personal fortune, estimated at $9-10 billion.
Steinberg's attorneys argued he should receive a lenient sentence as a "remote" recipient of the tips who "did not know about, let alone authorize, any payments to obtain illegal inside information," they said in a brief.
But prosecutors characterized Steinberg as a seasoned financial operator who understood the trades were based on illegally obtained information, even if he was not aware of payments.
Steinberg pressured an underling at SAC to obtain "edgy, proprietary information" that could make money and benefitted financially much more than the original tipsters, the government said.
Steinberg's attorneys are expected to appeal the verdict, amid questions raised in a related case over whether Judge Sullivan gave jurors correct instructions.
First Published: Saturday, May 17, 2014, 10:16