SAC Capital Arrest: Michael Steinberg Indicted on Insider Trading Charges (Video)

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The U.S. government's wide-ranging insider trading probe of SAC Capital Advisors put increased oressure on founder Steve Cohen. His principal manager Michael Steinberg was arrested in the early hours of Friday morning outside his Park Avenue home, the New York Daily News reported. Steinberg, a high-ranking portfolio manager who handled technology, media and telecommunications stocks at the firm, was indicted by a federal grand jury on four counts of securities fraud and one count of conspiracy to commit securities fraud, the authorities said. He is 41 years old.

Steinberg is the most senior SAC official to be charged in the FBI's ongoing investigation of insider-trading allegations. 

Earlier this month, Cohen reportedly agreed to pay a $600 million fine to get authorities to drop a civil probe of one of his off-shoot companies, CR Intrinsic. SAC Capital also agreed to pay $14 million to settle charges of improper trading in a Dell stock, news reports said. Cohen has said his firm has and will continue to cooperate with all government investigations.

Steinberg started at SAC in 1997, and is one of nine current or former employees accused of playing a part of an alleged insider trading conspiracy that began in late 2007 and lasted until 2009.

"Steinberg was another Wall Street insider who fed off a corrupt grapevine of proprietary and confidential information cultivated by other professionals who made their own rules to make money," Manhattan U.S. Attorney Preet Bharara said. "With lightning speed in at least one case, Mr. Steinberg seized on the opportunity to cash in and tried to keep his crime quiet."

Steinberg's lawyer Barry Berke said in a statement to Reuters that his client had done "absolutely nothing wrong."

"At all times, his trading decisions were based on detailed analysis as well as information that he understood had been properly obtained through the types of channels that institutional investors rely upon on a daily basis," Berke said.

By definition, insider trading involves trading of a corporation's stock or other securities, like bonds or stock options by individuals with access to non-public information about the company. All trading conducted by key employees, directors, or significant shareholders must be reported to the regulator or publicly disclosed, usually within a few business days of the trade.

If convicted, Steinberg faces up to 20 years in prison.


Tags
Insider Trading, Business, Corruption, U.S. Economy
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