He’s a good guy — except for that insider trading conviction.
Michael Steinberg, the fallen fund manager at Cohen’s SAC Capital Advisors, was sentenced to 3 ¹/₂ years in prison and ordered to pay a $2 million fine for insider trading.
Manhattan federal Judge Richard Sullivan on Friday spared him a longer jail term under federal sentencing guidelines, calling Steinberg a “good man.”
Prosecutors said Steinberg, 44, deserved as much as 6 ¹/₂ years in prison for reaping $1.8 million in illegal profits by trading on tips about tech stocks Dell and Nvidia as a portfolio manager at SAC.
Steinberg’s legal team asked for two years of jail time. His supporters also chimed in and urged the judge to show leniency.
Sullivan was clearly swayed by Steinberg’s friends and family, who sent 68 letters detailing his philanthropy and other good works, including helping a friend get better medical coverage and taking in and feeding people during Hurricane Sandy in 2012.
His mother begged the judge to show mercy for her “precious son.”
“Most of the people who come before me are good,” Sullivan said at the sentencing. “Your life takes it to a different category.”
Steinberg’s crimes, however, were “systematic trades over months and years,” Sullivan said. “For most people on the planet, $1.8 million is a lifetime of accumulated wealth.”
Steinberg’s own sophistication, and position as a community leader, contributed to the seriousness of the crimes, the judge added.
“It undermines confidence in markets,” he said.
Sullivan said he wanted the sentence to act as a deterrent to other traders, but that wasn’t a “driving concern.”
Steinberg will also forfeit about $365,000 and serve three years of supervised probation.
In December, Steinberg appeared to faint in the courtroom when a jury convicted him on securities and conspiracy charges. He is among eight SAC employees to either admit guilt or be charged with insider trading.
Another SAC fund manager, Mathew Martoma, was convicted two months later as part of a years-long probe into Cohen’s hedge fund.
After the sentencing, Steinberg laughed and smiled while hugging his friends and family.
The married father of two will remain free while he pursues an appeal.
His lawyers are expected to mount a legal challenge on the same grounds as those in a related case against Todd Newman and Anthony Chiasson. Defense lawyers argued that Sullivan botched the instructions to the jurors — that prosecutors had to prove insiders were leaking inside info in exchange for some “personal benefit.”
Sullivan said he would recommend Steinberg serve his sentence at Otisville Correctional, a medium-security prison in Orange County, NY.
Cohen’s SAC has settled with prosecutors for $1.8 billion after admitting to criminal behavior. Cohen hasn’t been personally charged with a crime.
SAC has since been renamed Point72 Asset Management and manages about $10 billion of Cohen’s personal fortune.