(The following is a reformatted version of a press release issued by the Office 
of Preet Bharara, the United States Attorney for the Southern District of New 
York and received via electronic mail. The release was confirmed by the 
March 29, 2013 
Michael Steinberg Allegedly Earned $1.4 Million in Illegal Profits  
Preet Bharara, the United States Attorney for the Southern District of New 
York, and George Venizelos, the Assistant Director-in-Charge of the New York 
Field Office of the Federal Bureau of Investigation (“FBI”), today announced 
conspiracy and securities fraud charges against MICHAEL STEINBERG, a portfolio 
manager at a hedge fund located in New York, New York (“Hedge Fund A”), for his 
alleged involvement in an insider trading scheme. As alleged, STEINBERG 
executed trades based on material, nonpublic information (“Inside Information”) 
provided to him by a Hedge Fund A analyst who worked for him, John Horvath, who 
previously pled guilty to securities fraud charges pursuant to a cooperation 
agreement. In particular, STEINBERG is alleged to have traded in two publicly 
traded technology companies, Dell, Inc. (“Dell”) and NVIDIA Corporation 
(“NVIDIA”), based on Inside Information that Horvath obtained from a circle of 
research analysts at several different investment firms, all of whom have also 
pled guilty for their roles in the scheme. Those individuals are: Jesse 
Tortora, a former research analyst at Diamondback; Spyridon “Sam” Adondakis, a 
former research analyst at Level Global; Danny Kuo, a former research analyst 
and fund manager at Whittier Trust Company; and Sandeep “Sandy” Goyal, a former 
research analyst who worked at the Manhattan office of Neuberger Berman. 
Steinberg’s trading in Dell and NVIDIA earned Hedge Fund A $1.4 million in 
illegal profits. STEINBERG was arrested this morning in Manhattan, and will be
presented and arraigned in Manhattan federal court before U.S. District Judge 
Richard J. Sullivan at 11:00 a.m. 
Manhattan U.S. Attorney Preet Bharara said: “As alleged, Michael Steinberg was 
another Wall Street insider who fed off a corrupt grapevine of proprietary and 
confidential information cultivated by other professionals who made their own 
rules to make money. With lightning speed in at least one case, Mr. Steinberg 
seized on the opportunity to cash in and tried to keep his crime quiet, as 
charged in the Indictment. As alleged, where once Mr. Steinberg answered only 
to his own rules, now he will have to answer to the rule of law, like so many 
others before him.”  
FBI Assistant Director-in-Charge George Venizelos said: “Mr. Steinberg’s arrest 
is the latest in the FBI’s campaign to root out insider trading at hedge funds 
and expert networking firms, resulting in more than 70 arrests so far. As 
alleged, Mr. Steinberg was at the center of an elite criminal club, where 
cheating and corruption were rewarded. Research was nothing more than 
well-timed tips from an extensive network of well-sourced analysts. The law is 
clear for everyone including Mr. Steinberg. Trading on inside information is 
illegal. The FBI will continue to police our markets and arrest anyone who 
violates the law.”  
In a separate action, the U.S. Securities and Exchange Commission (“SEC”) 
announced civil charges against STEINBERG. According to the allegations in the 
Superseding Indictment, other court documents, and evidence adduced at a 
related trial: 
A group of analysts at different hedge funds, including Tortora, Adondakis, 
Horvath, and Kuo obtained Inside Information directly or indirectly from 
employees who worked at certain public companies, and then shared the 
Information with each other and with the hedge fund portfolio managers for whom 
they worked, including STEINBERG. In particular, Tortora
provided Horvath and others with Inside Information related to Dell’s quarterly 
earnings (the “Dell Inside Information”), which Tortora obtained from Goyal 
who, in turn, had obtained the Information from an employee at Dell (the “Dell 
Insider”). For Dell’s quarter ended August 1, 2008, the results for which were 
publicly announced by Dell on August 28, 2008 (the “Dell Announcement”), the 
Dell Inside Information indicated that Dell would report gross margins that 
were materially lower than market expectations. In advance of the Dell 
Announcement, Horvath reported this negative Inside Information to STEINBERG. 
On August 18, 2008, after a series of calls from the Dell Insider to Goyal and 
from Goyal to Tortora and Horvath, Horvath then called STEINBERG. Within a 
minute of the telephone call between STEINBERG and Horvath, STEINBERG’s 
portfolio began shorting shares of Dell. One minute later, Horvath wrote an 
email to Steinberg stating: “Pls keep the DELL stuff especially on the down low 
. . . just mentioning that because JT [Jesse Tortora] asked me specifically to 
be extra sensitive with the info.” By the end of the day on August 18, 2008, 
STEINBERG had accumulated a net short position of over 167,000 shares of Dell.   
On August 26, 2008, Horvath confirmed in an email to STEINBERG and another 
portfolio manager at Hedge Fund A that Horvath’s Dell information had been 
based on a “2nd hand read from someone at the company.” STEINBERG responded: 
“Yes normally we would never divulge data like this, so please be discreet.” 
And on August 27, 2008, STEINBERG sent an email to Horvath with the subject 
line, “Dell action,” in which he asked, “Have u double checked [with] JT this 
week?” Horvath responded, “Yes he [Tortora] checked in [a] couple days ago, 
same read no change.” 
On August 28, 2008, before Dell’s Announcement, STEINBERG executed or caused to 
be executed additional short trades. STEINBERG also executed or caused to be 
executed options trades in Dell in advance of the Dell Announcement.
After the close of the market on August 28, 2008, Dell publicly announced gross 
margins that were substantially below market expectations. At the end of the 
next trading day following Dell’s Announcement, its stock price dropped by more 
than 13%. Shortly thereafter, STEINBERG covered his short position, and closed 
out his position in Dell option contracts, resulting in an illegal profit for 
Hedge Fund A of approximately $1 million.  
In addition, in 2009, Kuo obtained Inside Information regarding NVIDIA’s 
financial results (the “NVIDIA Inside Information”) in advance of NVIDIA’s 
quarterly earnings announcements. The NVIDIA Inside Information indicated, 
among other things, that NVIDIA’s gross margins would be lower than market 
expectations. Kuo obtained the NVIDIA Inside Information from a friend, Hyung 
Lim (“Lim”), who received it  from an employee at NVIDIA (the “NVIDIA 
Insider”). In advance of NVIDIA’s May 7, 2009 quarterly earnings announcement 
(the “NVIDIA Announcement”), Kuo provided the NVIDIA Inside Information, which 
he had obtained from Lim, to Tortora, Horvath, and others. Horvath, in turn, 
provided the NVIDIA Inside Information to STEINBERG, who executed or caused to 
be executed transactions in NVIDIA in advance of the NVIDIA Announcement. 
On May 7, 2009, NVIDIA publicly announced gross margins that were substantially 
lower than the market expected. At the end of the trading day following the 
NVIDIA Announcement, NVIDIA’s stock price dropped by more than 13%. Shortly 
thereafter, STEINBERG caused Hedge Fund A to liquidate its position in NVIDIA, 
resulting in an illegal profit for Hedge Fund A of over $400,000. 
STEINBERG, 41, of New York, New York, is charged with one count of conspiracy 
to commit securities fraud and four counts of securities fraud. The conspiracy 
count carries a maximum sentence of five years in prison and a fine of the 
greater of $250,000 or twice the gross gain or loss from the offense. Each of 
the securities fraud counts carries a maximum sentence of 20 years in prison 
and a fine of $5 million or twice the gross gain or loss from the offense.  
The allegations in the Indictment against STEINBERG are merely accusations and 
he is presumed innocent unless and until proven guilty. 
Horvath, 43, and Kuo, 37, each pled guilty to one count of conspiracy to commit 
securities fraud and two substantive counts of securities fraud in September 
2012 and April 2012, respectively.  
Tortora, 35, Adondakis, 41, and Goyal, 40, each pled guilty to one count of 
conspiracy to commit securities fraud and one substantive count of securities 
fraud in May 2011, April 2011, and June 2011, respectively. 
Mr. Bharara praised the investigative work of the FBI. He also thanked SEC. Mr. 
Bharara noted that the investigation is continuing.  
This case was brought in coordination with President Barack Obama’s Financial 
Fraud Enforcement Task Force, on which Mr. Bharara serves as a Co-Chair of the 
Securities and Commodities Fraud Working Group. The task force was established 
to wage an aggressive, coordinated and proactive effort to investigate and 
prosecute financial crimes. With more than 20 federal agencies, 94 U.S. 
attorneys’ offices and state and local partners, it’s the broadest coalition
of law enforcement, investigatory and regulatory agencies ever assembled to 
combat fraud.  
Since its formation, the task force has made great strides in facilitating 
increased investigation and prosecution of financial crimes; enhancing 
coordination and cooperation among federal, state and local authorities; 
addressing discrimination in the lending and financial markets and
conducting outreach to the public, victims, financial institutions and other 
organizations. Over the past three fiscal years, the Justice Department has 
filed nearly 10,000 financial fraud cases against nearly 15,000 defendants 
including more than 2,900 mortgage fraud defendants. For
more information on the task force, please visit 
This case is being handled by the Office’s Securities and Commodities Fraud 
Task Force.  
Assistant U.S. Attorneys Antonia M. Apps and John T. Zach are in charge of the 
(bjh) NY
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