SAC Capital Advisors LP fund manager Michael Steinberg was arrested on insider trading charges early Friday morning. FBI agents took the most senior employee at SAC ensnared in the wide-ranging Justice Department probe from his New York home early Friday.
Steinberg was part of SAC's Sigma Capital Management unit and one of 15 portfolio managers handling technology, media and telecommunications stocks before being placed on leave in September.
FBI Assistant Director George Venizelos, the New York special agent in charge of the Steinberg arrest, said that Steinberg's arrest is the latest in the FBI's campaign to root out insider trading at hedge funds and expert networking firms. The FBI alleges that Steinberg used what it calls "well-timed tips from an extensive network of well-sourced analysts."
"Mr. Steinberg was at the center of an elite criminal club, where cheating and corruption were rewarded," said Venizelos. "The law is clear for everyone including Mr. Steinberg. Trading on inside information is illegal."
Steinberg was scheduled to appear in New York's Southern District federal court on Friday at 11 a.m. EDT to be charged with crimes relating to conspiracy and securities fraud. He is among nine current or former SAC employees tied to insider trading allegations made by U.S. authorities. U.S. District Judge Richard Sullivan ruled in December that Steinberg was an uncharged co-conspirator in a $72 million scheme to obtain and swap illegal tips about technology companies.
"Michael Steinberg did absolutely nothing wrong," Barry Berke, Steinberg's lawyer, said in a statement, maintaining the same position he's taken since the beginning of the probe. "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."
Steinberg, who joined SAC Capital in 1997, was a close associate of SAC's founder, Steve Cohen, who has denied any wrongdoing and has not been charged or sued by the government.
Malik Singleton covers manufacturing and other economic news. His previous roles were with City Limits, TIME.com, Black Enterprise and PCMag.com. He is an adjunct at CUNY's...