Tough To Prove Hedge Fund Titan Michael Steinberg Broke Insider Trading Law

Indicted Steven Cohen Trader Is Major Jewish Philanthropist

Accused: Michael Steinberg has told friends he expects to be exonerated.
getty images
Accused: Michael Steinberg has told friends he expects to be exonerated.

By Reuters

Published March 31, 2013.
  • Print
  • Share Share
  • Single Page

To win a guilty verdict against one of hedge fund titan Steven A Cohen’s most senior portfolio managers, U.S. 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, U.S. 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 U.S. 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 U.S. 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.

The case against Steinberg, one of Cohen’s closest confidants, is different from other recent insider trading cases because it relies not so much on incriminating emails or wiretaps but instead on a chain of people who have admitted to passing along inside information.

By contrast, the pending criminal case against Mathew Martoma, a former SAC portfolio manager accused of trading on inside information in two drug stocks, is built on direct communications - including emails and precisely timed phone calls - between Martoma and someone with inside knowledge of the drug companies’ business.


The Jewish Daily Forward welcomes reader comments in order to promote thoughtful discussion on issues of importance to the Jewish community. In the interest of maintaining a civil forum, The Jewish Daily Forwardrequires that all commenters be appropriately respectful toward our writers, other commenters and the subjects of the articles. Vigorous debate and reasoned critique are welcome; name-calling and personal invective are not. While we generally do not seek to edit or actively moderate comments, our spam filter prevents most links and certain key words from being posted and The Jewish Daily Forward reserves the right to remove comments for any reason.





Find us on Facebook!
  • Move over Dr. Ruth — there’s a (not-so) new sassy Jewish sex-therapist in town. Her name is Shirley Zussman — and just turned 100 years old.
  • From kosher wine to Ecstasy, presenting some of our best bootlegs:
  • Sara Kramer is not the first New Yorker to feel the alluring pull of the West Coast — but she might be the first heading there with Turkish Urfa pepper and za’atar in her suitcase.
  • About 1 in 40 American Jews will get pancreatic cancer (Ruth Bader Ginsberg is one of the few survivors).
  • At which grade level should classroom discussions include topics like the death of civilians kidnapping of young Israelis and sirens warning of incoming rockets?
  • Wanted: Met Council CEO.
  • “Look, on the one hand, I understand him,” says Rivka Ben-Pazi, a niece of Elchanan Hameiri, the boy that Henk Zanoli saved. “He had a family tragedy.” But on the other hand, she said, “I think he was wrong.” What do you think?
  • How about a side of Hitler with your spaghetti?
  • Why "Be fruitful and multiply" isn't as simple as it seems:
  • William Schabas may be the least of Israel's problems.
  • You've heard of the #IceBucketChallenge, but Forward publisher Sam Norich has something better: a #SoupBucketChallenge (complete with matzo balls!) Jon Stewart, Sarah Silverman & David Remnick, you have 24 hours!
  • Did Hamas just take credit for kidnapping the three Israeli teens?
  • "We know what it means to be in the headlines. We know what it feels like when the world sits idly by and watches the news from the luxury of their living room couches. We know the pain of silence. We know the agony of inaction."
  • When YA romance becomes "Hasidsploitation":
  • "I am wrapping up the summer with a beach vacation with my non-Jewish in-laws. They’re good people and real leftists who try to live the values they preach. This was a quality I admired, until the latest war in Gaza. Now they are adamant that American Jews need to take more responsibility for the deaths in Gaza. They are educated people who understand the political complexity, but I don’t think they get the emotional complexity of being an American Jew who is capable of criticizing Israel but still feels a deep connection to it. How can I get this across to them?"
  • from-cache

Would you like to receive updates about new stories?




















We will not share your e-mail address or other personal information.

Already subscribed? Manage your subscription.