SAC's Steinberg asks for two-year sentence

NEW YORK Sun May 4, 2014 6:47am EDT

Michael Steinberg (L), a top portfolio manager at Steven A. Cohen's SAC Capital Advisors hedge fund, departs Federal Court in Manhattan after being found guilty on charges that he traded on insider information in New York December 18, 2013. REUTERS/Lucas Jackson

Michael Steinberg (L), a top portfolio manager at Steven A. Cohen's SAC Capital Advisors hedge fund, departs Federal Court in Manhattan after being found guilty on charges that he traded on insider information in New York December 18, 2013.

Credit: Reuters/Lucas Jackson

NEW YORK (Reuters) - Michael Steinberg, a portfolio manager at Steven A. Cohen's SAC Capital Advisors who was found guilty last year on insider trading charges, has asked for a two-year sentence, far shorter than the term recommended by probation officials.

In a 65-page sentencing memo, Steinberg's lawyer Barry Berke referred to his "character and broader life accomplishments" in arguing that his sentence should be only two years in prison.

A report by the court's probation department recommended that Steinberg be sentenced to a prison term of 4-1/4 to 5-1/4 years for his December conviction on one count of conspiracy to commit securities fraud and four counts of securities fraud.

"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," Berke wrote to U.S. District Judge Richard Sullivan.

Berke also said Steinberg "did not know about, let alone authorize, any payments to obtain illegal inside information," and that he did not "initiate the conspiracy, which existed before he was alleged to have joined it."

Eight current or former employees of SAC Capital have been convicted on insider trading charges. In February, a jury found Matthew Martoma, a former portfolio manager at SAC Capital, guilty on charges stemming from an insider trading scheme prosecutors said allowed the hedge fund to make profits and avoid losses of $275 million.

In April, a federal judge in Manhattan approved a $1.2 billion criminal settlement for insider trading charges, which SAC Capital agreed to pay, and accepted a guilty plea from the hedge fund firm.

SAC Capital last month rebranded itself Point72 Asset Management as it shifted toward being a so-called family office managing mostly Cohen's own fortune.

Meanwhile, the 2nd U.S. Circuit Court of Appeals in New York is hearing a case that could affect the sentencing.

The appeals court is set to rule on whether to be convicted of insider trading, the recipient of non-public information must know that the source of the tip benefited from the disclosure.

Referring to the case, Berke requested that the court grant bail for Steinberg pending the appeal in light of "the substantial question of law raised by… (the issue) concerning whether the government must prove a tippee's knowledge of the benefit conferred to the tipper."

"We have conferred with the government and they consent to the request for bail pending appeal," Berke said.

Steinberg is scheduled to be sentenced on May 16.

(Reporting By Casey Sullivan and Nate Raymond; Editing by Nick Zieminski)

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Comments (3)
lysergic wrote:

May 04, 2014 9:35am EDT  --  Report as abuse
njglea wrote:
Two years for conspiring to take down the global economy and making it happen? Federal and state prosecutors should charge every person and company involved in this conspiracy with racketeering using RICO, strip them of every bit of the wealth they stole and make them work in government cafeterias at minimum wage for 20 years instead of paying for them to be in executive prisons. The recouped wealth can be used to pay down the national debt and reduce average American’s tax burden.

May 04, 2014 9:46am EDT  --  Report as abuse
QuietThinker wrote:
Club Fed for 4 1/4 to 5 1/4 years is already way too lenient. Financial megacrimes continue because single digit sentences provide no deterrent whatsoever. Most of the crooks know enough to give a few scraps from their bounty to charity just in case they get caught.

The take was at least $275 million. Divide that by his requested 2 year sentence. How many folks would turn down $100 million plus a year to take a temporary job away from home for two years. Compare that to what our servicemen get for being away from their families under far, far more difficult circumstances than Club Fed!

May 04, 2014 3:27pm EDT  --  Report as abuse
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