[ by Melanie Gretchen ]

SAC Capital Advisors LP isn't cutting employees any slack.

Michael Steinberg is a portfolio manager at SAC unit Sigma Capital Management.  After his name surfaced in the government's broad investigation into insider trading,  he was put on (paid) leave, according to a person familiar with the matter, even though publicly he hasn't been accused of wrongdoing.

Should his unit be called "Stigma Capital Management"?

To its credit, SAC Capital could be wise to cover its bases.  Just last week, Jon Horvath, a former technology analyst at Sigma, pled guilty on Friday to insider-trading charges in Manhattan federal court.  He admitted to receiving confidential financial information about technology companies Dell Inc. and Nvidia Corp.  Horvath has since said he shared that information with a Sigma portfolio manager – not necessarily Mr. Steinberg who supervised him.  [See our What Went Wrong story, "Another Insider Trading Plea at SAC Capital Advisors"].

Other factors not in Mr. Steinberg's favor:

• Horvath was the 3rd former SAC employee to plead guilty and cooperate with the government, out of a 7-person conspiracy that earned some $62 million in illegal gains.  The profits were attained by trading on secret tips from executives at publicly traded technology companies
• He is a close associate of SAC founder Steven A. Cohen who prosecutors have been unable to charge with wrongdoing.

C-I Note: Whether that's fair remains to be seen; what we do know is SAC manages some $14 billion – and that show must go on!

For further details, go to [WSJ, 10/2/12].