Federal agents have arrested a SAC Capital Advisors portfolio manager, the most senior employee at the giant hedge fund ensnared government’s vast insider trading investigation.
Michael Steinberg, 40, was arrested at his Park Avenue apartment early Friday morning and taken out of his building in handcuffs. He has worked at SAC since 1997 and became one of the firm’s senior portfolio managers, focusing on technology stocks.
He is expected to make an appearance in Federal District Court in Manhattan on Friday before Judge Richard Sullivan.
“Michael Steinberg did absolutely nothing wrong,†said Barry H. Berke, a lawyer for Mr. Steinberg. “Caught in the crossfire of aggressive investigations of others, there is no basis for even the slightest blemish on his spotless reputation. Mr. Steinberg is thankful for all the people who have continued to stand by him and believe in his innocence.â€
The charges against Mr. Steinberg had widely been expected.
Last September, a former SAC analyst, Jon Horvath, who worked directly for Mr. Steinberg pleaded guilty to being part of an insider trading ring that illegally traded the technology stocks Dell and Nvidia. As part of his guilty plea, he implicated Mr. Steinberg, saying that he gave the confidential information to his SAC boss and that they traded based on the secret financial data about those two companies.
In recent months, Mr. Horvath has met with authorities and provided them with information about his former boss.
The government has previously identified Mr. Steinberg, a technology stock specialist in SAC’s Sigma Capital unit, as a co-conspirator in a case involving Mr. Horvath and two former hedge fund managers at other firms, Todd Newman and Anthony Chiasson. A jury convicted Mr. Newman and Mr. Chiasson in December on charges that they traded shares of Dell while in possession of secret information about the technology company.
Mr. Steinberg has been named in a superseding indictment in Mr. Newman and Mr. Chiasson’s case, according to person familiar with Mr. Steinberg’s case.
Including Mr. Steinberg, at least nine current or former SAC employees have been tied to allegations of insider trading while working there. Four have pleaded guilty to federal charges.
