U.S. District Judge Richard Sullivan also ordered Steinberg to pay a $2 million fine and forfeit the more than $365,000 in compensation he gained from the illegal trading. But Sullivan allowed Steinberg to remain free on bail pending appeal.
During a more than hour-long hearing in Manhattan federal court, Sullivan said he decided to impose a sentence lower than called for under federal guidelines based in part on the many letters of support and testimonials he received from the defendant's relatives and friends.
On the advice of his attorney, Steinberg did not speak during the hearing.
"I think that Mr. Steinberg has lived a life that by and large has not been just good, but very good," Sullivan said. But, the judge added, "there was insider trading here. There was a conspiracy. Not once or twice, but quarter after quarter."
Citing the nearly $1.8 million gain in Steinberg's portfolio from the illegal trading, Sullivan said "for most people on the planet" that total would represent "a lifetime of accumulating wealth."
Prosecutors had argued that Steinberg should spend as long as 6 1/2 years behind bars. Defense attorneys urged a sentence of no more than two years — less than half the time the U.S. Probation Office recommended in a pre-sentencing report.
The defense team plans to appeal the conviction in a case that helped contribute to the downfall of SAC Capital, the once-envied and highly profitable hedge fund founded by Cohen.
Steinberg, 42, is a Manhattan resident and father of two. He's one of eight former SAC Capital employees — and the closest to Cohen in the hedge fund's hierarchy — convicted on insider-trading charges.
A Manhattan federal court jury of nine women and three men found the ex-portfolio manager guilty in December a! fter prosecution evidence in a four-week trial showed he used illegally leaked information to trade shares of tech firms Dell and Nvidia. The data had been gathered by his former financial analyst, Jon Horvath, who pleaded guilty to insider trading and testified against Steinberg.
Defense attorney Barry Berke argued in a defense sentencing memorandum that Steinberg was "at least four steps removed" from the tech firm insiders who allegedly provided the information and wasn't involved in the events or payments that caused them to breach their fiduciary duties.
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Berke also highlighted some of those arguments during the sentencing hearing.
Assistant U.S. Attorney Antonia Apps in turn argued in a prosecution sentencing memo that evidence showed Steinberg "incentivized" Horvath "to obtain illegal information that he could 'make money on.'"
Cohen has not been charged with criminal wrongdoing. But a pending Securities and Exchange Commission administrative proceeding alleges he failed to properly supervise employees who became involved in insider trading.
SAC Capital in November reached a record $1.8 billion settlement of insider-trading charges. The agreement with federal prosecutors forced the hedge fund to permanently cease handling investments for outside clients.
The hedge fund last month was transformed into a so-called family office that manages Cohen's estimated $9 billion to $11 billion personal fortune.
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