US Attorney Preet Bharara has admitted defeat in a high profile insider trading case

The so-called “Sheriff of Wall Street,” US Attorney Preet Bharara, has dismissed charges against former SAC Capital trader Michael Steinberg and six others who pleaded guilty to insider trading.

In December 2013, Steinberg fainted in court before a jury found him guilty of using inside information to trade shares of Dell and Nvidia fo $US1.8 million in profits.

In May 2014, a judge sentenced the married father of two to to three-and-a-half years in federal prison.

Today, he’s exonerated.

Here’s the statement from Bharara’s office:

“Today, this Office will move to dismiss charges against Michael Steinberg, who was previously convicted at trial, and six cooperating witnesses who pleaded guilty, all in connection with the same insider trading scheme charged in United States v. Newman and Chiasson. The decision to dismiss these charges follows the Second Circuit’s Newman decision, and also reflects determinations, after careful consideration of all of our prior insider trading prosecutions, that insisting on maintaining guilty pleas in these cases would not be in the interests of justice. These prosecutions were all undertaken in good faith reliance on what this Office and others, including able defence counsel for all those who pleaded guilty, understood to be the well-settled law before Newman.”

Bharara, who has been cracking down on insider trading since 2009, had a near-perfect track record for convictions until the reversal of
the insider-trading convictions for former hedge fund managers Anthony Chiasson and Todd Newman in December 2014.

Chiasson, cofounder of the defunct hedge fund Level Global, and Newman, who worked at Diamondback, were co-defendants also accused of trading on inside information in Dell and Nvidia stocks.
Steinberg and the other traders and analysts who had their charges dismissed on Thursday were tied to the same case.

The appeals court ruled that “the government failed to present sufficient evidence that the defendants wilfully engaged in substantive insider trading or a conspiracy to commit insider trading in violation of the federal securities laws.”

Bharara didn’t immediately back down. In July, Solicitor General Donald Verrilli filed a petition asking the US Supreme Court to review the appellate court’s decision. That petition was rejected earlier this month, marking the end of a five-year long case.

The FBI raided Level Global and Diamondback in November 2010, and the arrests were made in January 2012.

Level Global, once a $US4 billion hedge fund, closed a few months after the FBI’s raid.

Earlier this year, the now-defunct hedge fund’s cofounder and CEO David Ganek has filed a lawsuit against the FBI and prosecutors from Bharara’s office over their “reckless” raid.

NOW WATCH: We got our hands on Donald Trump’s failed 1989 board game and it’s bizarre

NOW WATCH: Money & Markets videos

Want to read a more in-depth view on the trends influencing Australian business and the global economy? BI / Research is designed to help executives and industry leaders understand the major challenges and opportunities for industry, technology, strategy and the economy in the future. Sign up for free at research.businessinsider.com.au.