Getty ImagesThe SEC alleges former SAC Capital trader Michael Steinberg booked more than $3 million in profits on insider information he received regarding Dell and Nvidia earnings reports.
The agency also says Steinberg passed along the information to another portfolio manager.
Steinberg was arrested this morning.
The SEC got its hands on the following email sent by Jon Horvath, an analyst who reported to Steinberg at Sigma Capital. Horvath himself has been charged. From the agency:
Horvath sent an e-mail to the other portfolio manager and copied Steinberg on the message. The e-mail stated:
“I have a 2nd hand read from someone at the company – this is 3rd quarter I have gotten this read from them and it has been very good in the last quarters. They are seeing GMs miss by 50-80 [basis points] due to poor mix, [operating expenses] in-line and a little revenue upside netting out to an [earnings per share] miss. . . . Please keep to yourself as obviously not well known.”
The SEC alleges that two minutes later, Steinberg chimed in, “Yes, normally we would never divulge data like this, so please be discreet.”
Earlier this month, SAC affiliate CR Intrinsic Investors LLC agreed to pay the largest-ever insider trading settlement, $600 million.
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