To win a conviction against one of hedge fund titan Steven Cohen’s most senior portfolio managers, US prosecutors face a tough task: convincing a jury that a man who already admitted to breaking the law is telling the truth on the witness stand.
On Friday, US authorities arrested and charged Michael Steinberg, a 16-year veteran of Cohen’s $15 billion SAC Capital Advisors, with insider trading in shares of the technology stocks Dell and Nvidia.
The case against Steinberg, 40, is built heavily on the testimony of one of his former colleagues, Jon Horvath, who has admitted to insider trading and is now cooperating with the government.
“What they’re going to need to prove is that Steinberg got inside information that he knew came from an insider and that he then traded on it,” said Marc Greenwald, a former US prosecutor in New York who is now a partner at Quinn Emanuel in New York, and not involved in the case. “It all depends on what Horvath said he said and whether everybody believes him.”
A spokeswoman for US Attorney Preet Bharara declined to comment. A spokesman for SAC Capital declined to comment.
Steinberg’s lawyer, Barry Berke, said after Steinberg’s arrest that his client had done “absolutely nothing wrong” and his “trading decisions were based on detailed analysis.”
Steinberg could not be reached for comment. Berke did not immediately respond to a request for comment for this article.