More On Legal & Compliancefrom The Advisor's Professional Library
- Differences Between State and SEC Regulation of Investment Advisors States may impose licensing or registration requirements on IARs doing business in their jurisdiction, even if the IAR works for an SEC-registered firm. States may investigate and prosecute fraud by any IAR in their jurisdiction, even if the individual works for an SEC-registered firm.
- Client Communication and Miscommunication RIA policies and procedures must specify what type of communications should be retained. The safest course of action is for RIAs to retain all communicationsto clients, from clients, and about client accounts. To comply with fiduciary obligations, communications must be thorough and not mislead.
NEW YORK (AP) — A portfolio manager for one of the nation's largest hedge funds who was accused by the government of cheating to boost sagging results in 2007 was convicted on Wednesday of insider trading charges.
The verdict against Michael Steinberg in Manhattan federal court was announced only after he was checked by a nurse because he had slumped in his seat and appeared to faint when the jury first entered the courtroom.
U.S. District Judge Richard J. Sullivan, who set sentencing for April 25, told jurors Steinberg had a "bit of a dizzy spell" but that he had been checked by the nurse and Steinberg's brother, who's a doctor, and that everyone including the 41-year-old defendant agreed he was fit to receive the verdict. When the first of five guilty verdicts was read aloud, Steinberg's head dropped back and he looked up.
"Disappointing verdict, I know," the judge told Steinberg after jurors left the courtroom as he again offered medical assistance if the defendant required it. Steinberg did not.
The drama came amid a case that was the first to result from the government's focus on insider trading at SAC Capital Advisors.
The company, based in Stamford, Conn., was founded by billionaire businessman Steven A. Cohen, who hasn't been charged criminally but faces civil claims. This month it agreed to pay a record $1.8 billion to settle civil and criminal insider trading charges.
A spokesman for Steinberg's defense said lawyers wouldn't immediately comment on the verdict.
Lawyer Barry Berke has said an analyst who worked for Steinberg framed him to avoid going to prison himself. After the verdict was announced, Steinberg shook his head as he spoke with his lawyer and later embraced family members.
Prosecutors during the monthlong trial said Steinberg made illegal trades between 2007 and 2009 after receiving insider information from an analyst, Jon Horvath, of San Francisco. Horvath pleaded guilty last year to insider trading charges and agreed to testify against Steinberg as part of his plea deal.