Former SAC Capital Advisors LP hedge fund manager Michael Steinberg was sentenced to 3 1/2 years in prison for insider trading, capping one of the biggest victories for prosecutors who spent seven years investigating the hedge fund and its boss, Steven A. Cohen.
Steinberg, 42, who handled technology, media and telecommunications stocks at SAC Capital’s Sigma Capital Management unit, was the longest-serving employee at the hedge fund convicted in the U.S. probe. He was found guilty in December of an insider scheme involving tech stocks that garnered $1.8 million in illegal profits.
“For most people on the planet, $1.8 million of gain is a lifetime of accumulated wealth,” U.S. District Judge Richard Sullivan said before sentencing Steinberg today in Manhattan federal court. He said Steinberg is “basically a good man,” citing almost 70 letters of support, including those sent by Steinberg’s wife and father.
Prosecutors have won convictions against eight managers and analysts in their investigation of SAC Capital, amid a broader crackdown on market cheating at hedge funds, publicly traded companies and so-called expert-networking firms. SAC Capital last year reached a $1.8 billion settlement with the U.S., pleading guilty to making hundreds of millions of dollars in illegal profits and fostering a culture of criminality.
Steinberg was also fined $2 million and ordered to forfeit $365,000.
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