Michael Steinberg, a portfolio manager at the $15 billion hedge fund SAC Capital Advisors, was arrested by the FBI at his home in New York City early on Friday morning in connection with a long-running insider-trading investigation.
Steinberg, 40, is facing charges that he traded shares of Dell Inc. on insider information. An SAC Capital spokesman had no immediate comment on the arrest. Steinberg's lawyer Barry Berke said his client had done "absolutely nothing wrong," reports the Chicago Tribune.
"At all times, 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," Berke said.
Counting Steinberg, nine people have been implicated or charged with wrongful trading while they were employed by SAC. He is the most senior employee to be implicated in the government’s probe. Jon Horvath, a former SAC analyst who worked closely with Steinberg, pleaded guilty last year to using illegally obtained information to trade in Dell and Nvidia Corp.
Steinberg’s arrest comes just two weeks after SAC agreed to pay a record $616 million to the U.S. Securities and Exchange Commission to settle civil charges of insider trading.
“As alleged, Michael Steinberg was another Wall Street insider who fed off a corrupt grapevine of proprietary and confidential information cultivated by other professionals who made their own rules to make money,” said U.S. Attorney Preet Bharara.
According to court papers, “Steinberg executed and caused to be executed securities transactions in certain of the technology companies in whole or in part on the inside information” provided to him by analyst Jonathan Horvath, who has already pleaded guilty and is cooperating with authorities.”