Signage stands outside the headquarters of SAC Capital Advisors in Stamford,… (Victor J. Blue / Bloomberg )
In another sign of the government's intense focus on illicit trading on Wall Street, the FBI early Friday arrested a longtime SAC Capital Advisors portfolio manager on insider-trading charges.
Federal agents took Michael Steinberg into custody at his residence on Manhattan's Upper East Side, an FBI spokesman said. More information about the charges was to be released later in the day.
Steinberg, 40, who has worked at the firm since 1997, would reportedly be the most senior of the hedge fund's employees to face charges in the government's wide-ranging investigation into insider trading.
A portfolio manager overseeing trades in technology, media and telecommunications stocks at SAC Capital's affiliate, Sigma Capital Management, Steinberg was put on leave in September, according to a source familiar with the matter.
Barry Berke, Steinberg's attorney, said his client "did 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 in an emailed statement Friday morning.
"Caught in the crossfire of aggressive investigations of others, there is no basis for even the slightest blemish on his spotless reputation. Mr. Steinberg is thankful for all the people who have continued to stand by him and believe in his innocence," Berke said.
Steinberg's arrest follows a criminal case brought last year against Mathew Martoma, a former portfolio manager at another SAC Capital affiliate, CR Intrinsic Investors.
Federal prosecutors have accused Martoma of participating in the most profitable insider-trading scheme in U.S. history, netting $276 million in profit and avoided losses. The case involves trading stock of two pharmaceutical companies that were developing a drug to treat Alzheimer's disease. Martoma has pleaded not guilty.
The case against Martoma fueled speculation the government's ultimate target is Steven A. Cohen, the billionaire who founded and runs Connecticut-based SAC Capital. Cohen has not be accused of any wrongdoing.
Two weeks ago, SAC Capital agreed to pay a record $616 million to settle two insider-trading civil cases brought by the Securities and Exchange Commission. The firm neither admitted nor denied wrongdoing as part of the proposed settlements.
S&P 500 trades above all-time closing high
Five ways divorce will impact your finances
Dreamliner grounded, but Boeing stock soars