Published May 03, 2013
NEW YORK – A federal judge has set November 18 for the start of the criminal trial of Michael Steinberg, the most senior employee of Steven A. Cohen's hedge fund SAC Capital Advisors to be indicted for insider trading.
U.S. District Judge Richard Sullivan in Manhattan also declined to allow Steinberg's case to be randomly assigned to another judge.
Steinberg's lawyer, Barry Berke, had previously asked for the switch, arguing that Sullivan had given prosecutors an easier burden to meet in other insider-trading cases compared to other judges.
"So you're stuck with me, Mr. Steinberg," Sullivan said, adding that he would ensure Steinberg would get a fair trial.
Steinberg pleaded not guilty on March 29 to five counts of conspiracy and securities fraud for allegedly trading on shares of computer company Dell Inc and chipmaker Nvidia Corp in 2008 and 2009 based on inside information.
The tips netted $1.4 million in illegal profits for Cohen's $15 billion hedge fund, prosecutors said. A related U.S. Securities and Exchange Commission complaint said Steinberg generated $6.4 million in profits and avoided losses for SAC Capital.
Steinberg is one of nine current or former SAC Capital employees charged or implicated in an extensive government crackdown on insider trading.
Billionaire Cohen has not been accused of any wrongdoing.
Last month, SAC Capital agreed to pay $616 million to the SEC to settle allegations of improper trading arising out of an investigation into a former portfolio manager, Mathew Martoma, who has also pleaded not guilty to insider trading.
Steinberg is on paid leave from the firm after his suspension from SAC Capital's Sigma Capital division last year.
SAC Capital spokesman Jonathan Gasthalter on Friday referred to a previous statement in which he said: "Mike has conducted himself professionally and ethically during his long tenure at the firm. We believe him to be a man of integrity."
Sullivan set July 12 for the next court date in the case.
The case is U.S. v. Steinberg, U.S. District Court, Southern District of New York: United States v. Steinberg, No. 12-cr-121, and Securities and Exchange Commission v. Steinberg, No. 13-2082.
(Reporting by Bernard Vaughan; Additional reporting by Nate Raymond; Editing by Richard Chang)