If a new report about hedge fund corruption is to be believed, the industry is overrun with unethical and illegal activity. Some 46% of people at hedge funds believe their competitors break the law or act unethically and 30% say they’ve seen wrongdoing themselves. Less than a week after F.B.I. agents handcuffed SAC Capital portfolio manager Michael Steinberg and escorted him from his Park Avenue apartment, the report, released yesterday, says that more than a third of hedge fund professionals believe they have to break the rules to get ahead. …read more
Source: FULL ARTICLE at Forbes Latest
Tag Archives: Michael Steinberg
SAC Capital portfolio manager arrested in NYC
A portfolio manager for the hedge fund operator SAC Capital Advisors has been arrested in New York City as part of a federal insider trading investigation.
The FBI says Michael Steinberg was arrested at 6 a.m. Friday at his home. It declined to specify the charges.
His attorney says in a statement that Steinberg “did absolutely nothing wrong.”
Attorney Barry H. Berke says Steinberg was “caught in the crossfire of aggressive investigations” into other people’s activities.
At least four other people associated with the Stamford, Conn.-based firm have been arrested over a period of about four years.
On March 15, the Securities and Exchange Commission said that two affiliates of SAC Capital Advisors would pay more than $614 million in what federal regulators called the largest insider trading settlement ever. The settlement is subject to court approval.
SAC Portfolio Manager Arrested in Insider-Trading Investigation
By Reuters
Filed under: Dell, Scandals and Lawsuits, Stocks, People
Michael Steinberg, a portfolio manager at Steven A. Cohen’s $15 billion hedge fund, was arrested by the Federal Bureau of Investigation at his home in New York City early on Friday morning in connection with a long-running insider-trading investigation, an FBI spokesman said.
Federal prosecutors had been considering indicting Steinberg on charges that he traded shares of Dell Inc. (DELL) on insider information, sources close to the matter said on Thursday.
Steinberg’s lawyer Barry Berke said in a statement to Reuters that his client had done “absolutely nothing wrong.”
“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.
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Steinberg, 40, is the most senior SAC Capital Advisors employee to be charged in the U.S. government‘s probe into how hedge funds may use illegally obtained information to trade. Including Steinberg, nine people have been either charged or implicated with wrongful trading while they were employed at the Stamford, Conn.-headquartered SAC.
An SAC Capital spokesman had no immediate comment on the arrest.
Steinberg’s arrest had been widely expected after Jon Horvath, a former SAC analyst who worked closely with him, pleaded guilty last year to using illegally obtained information to trade in Dell and Nvidia Corp. (NVDA). Horvath has been cooperating with the government and had implicated Steinberg.
SAC Capital suspended Steinberg from his post in October 2012, and he has been moving among several hotels in New York City in recent weeks, according to Reuters sources, as he wanted to avoid being arrested at his Upper East Side home where he lives with his wife and two children.
The arrest comes 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. SAC neither admitted nor denied wrongdoing at that time.
But the government made clear that that settlement didn’t preclude further charges.
As part of that settlement, SAC Capital agreed to pay $14 million to settle charges of improper trading in Dell, in which a former trader who reported to Steinberg had been involved.
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