US prosecutors zero in on SAC Capital insider Michael Steinberg
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US prosecutors are nearing a decision on whether to pursue criminal charges against SAC Capital Advisors portfolio manager Michael Steinberg related to an insider trading investigation involving shares of Dell Inc , according to two people familiar with the matter.
Steinberg, 40, a technology portfolio manager with SAC Capital's Sigma Capital division, previously had been named by prosecutors as an unindicted co-conspirator in a criminal prosecution involving two other recently convicted hedge fund traders, Todd Newman and Anthony Chiasson, who had also traded Dell shares.
It is not known what possible charges prosecutors are contemplating bringing against Steinberg. During the Newman and Chiasson trial late last year, prosecutors had introduced emails that showed Steinberg and his colleagues discussing Dell's earnings performance before they were publicly released.
Steinberg's lawyer, Barry Berke, said his client "did absolutely nothing wrong." An SAC Capital spokesman declined to comment. Dell has also declined to comment on the case.
The sources said federal authorities continue to interview witnesses and expect a decision on whether to file criminal charges against Steinberg within several weeks, though they noted the situation and timing are fluid.
If Steinberg is charged by federal authorities, he will be one of the most senior people at Steven A. Cohen's SAC Capital to become embroiled in the government's investigation of insider trading in the $2 trillion hedge fund industry.
Cohen's $14 billion hedge fund has been under investigation by US authorities for at least six years. Cohen himself has not been charged, nor has he been accused of any wrongdoing.
One of the hedge fund industry's most successful traders, Cohen has been working to calm the nerves of his outside investors, who have until Feb. 14 to decide whether to redeem some of their money from SAC Capital.
Even though SAC Capital's flagship fund grew 13 percent last year, more than twice the gain for the average hedge fund, the firm is bracing for redemption requests of as much as $1 billion, according to people familiar with the hedge fund. Outside investors account for roughly $6 billion of SAC Capital's money.
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