SAC Capital Advisors, the $12 billion hedge fund run by Steven A. Cohen, was the target of a failed $4 million shakedown by a Brooklyn rabbi.  Rabbi Milton Balkany got a 4-year prison sentence and this advice from Federal Judge Denise Cote:  "Just because you lead a charitable institution doesn’t give you a pass to commit extortion and fraud."  The Rabbi was convicted in November of extortion, blackmail, wire fraud and making false statements.

    The Accusations.   Mr. Balkany of Borough Park was accused of telling Stamford, CT-based SAC that a prisoner to whom he served as a "spiritual adviser" had details about an insider trading scheme at the hedge fund.  In a recorded conversation with a SAC lawyer, the Rabbi said he'd instruct the inmate not to disclose the insider trading if the hedge fund made $2 million payments to each of 2 religious schools.  The lawyer then took part in a sting operation in which he handed over 2 checks totaling $3.25mn. 

Judge Cote considered the Rabbi's "lifetime of good works" and "generosity of spirit," in handing down the 4-year sentence - less than what's suggested under federal guidelines.  The Rabbi was locked up immediately because the judge considered him a flight risk.  No evidence of insider trading at SAC emerged at the Rabbi’s trial.  [NYT DealBook, 2/18]