| NEW YORK
NEW YORK May 12 U.S. prosecutors are urging a
federal judge impose a sentence of up to 6-1/2 years in prison
for Michael Steinberg, a portfolio manager at Steven A. Cohen's
SAC Capital Advisors convicted last year on insider trading
In a filing late on Friday in New York federal court,
prosecutors argued Steinberg should be sentenced up to a year
more than what the court's probation office had called
appropriate, based on trading the government said Cohen
conducted at his employee's recommendation.
"The fact the government did not allege that Cohen was a
coconspirator at trial, and argued that Cohen's trading was
irrelevant to the crimes charged in the indictment, is of no
moment here," the government said in the filing.
The government said U.S. District Judge Richard Sullivan
should sentence Steinberg to 5-1/4 to 6-1/2 years in prison and
order him to forfeit $365,142.
Steinberg's lawyers earlier this month requested a sentence
of two years in prison. Barry Berke, a lawyer for Steinberg,
declined to comment on Monday on the prosecutor's sentencing
Steinberg, who is scheduled to be sentenced Friday, was
found guilty in December on five counts of conspiracy and
Prosecutors accused Steinberg, 42, of trading on
confidential information about Dell Inc and Nvidia
Corp passed to him by an SAC analyst who swapped
illegal tips with friends at other firms.
He is one of eight current or former employees of SAC
Capital to be convicted for insider trading. SAC Capital itself
also pleaded guilty to fraud charges and has agreed to pay $1.8
billion in criminal and civil settlements.
SAC Capital recently rebranded itself Point72 Asset
Management as it shifted toward being a so-called family office
managing mostly Cohen's own fortune. A spokesman for Point72 did
not respond to a request for comment Monday.
Cohen has not been criminally charged. But the U.S.
Securities and Exchange Commission has launched an
administrative action to bar him from the securities industry
for failing to supervise two portfolio managers including
Steinberg and prevent insider trading. Cohen denies wrongdoing.
In their motion Friday, prosecutors argued that in
sentencing Steinberg, Sullivan should attribute to him $1.83
million in losses they alleged Cohen avoided by selling Dell
stock at Steinberg's recommendation in August 2008.
Doing so would add to the $1.82 million that Steinberg
personally made in his own portfolio thanks to insider
information and, under federal sentencing guidelines, result in
a higher sentence than the 4-1/4 to 5-1/4 years in prison the
probation office recommended, prosecutors said.
Steinberg's lawyers are also seeking to have their client
remain out on bail pending appeal in light of a related case
pending at the 2nd U.S. Circuit Court of Appeals.
The 2nd Circuit is considering whether to be convicted of
insider trading, the recipient of non-public information must
know that the source of the tip benefited from the
The case is U.S. v. Steinberg, U.S. District Court, Southern
District of New York, No. 12-cr-00121.
(Editing by W Simon)