Reuters, New York :
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.
