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Of all the former employees at Steven A. Cohen’s SAC Capital Advisors who have been charged with insider trading, Michael S. Steinberg was closest to the hedge fund’s billionaire founder, starting as a young recruit and rising to become one of his most trusted money managers.

He joined SAC in 1997, three years after graduating from college, and was part of a group of traders who socialized with Cohen at joint vacations and sporting events.

Steinberg introduced the hedge-fund owner to his art adviser, and Cohen attended Steinberg’s 1999 New York wedding, according to former colleagues, friends and people with knowledge of SAC.

Steinberg was arrested Friday by FBI agents at his Manhattan apartment, the seventh current or former SAC employee to be accused by the U.S. of insider trading while at the hedge fund.

A 16-year veteran of Cohen’s firm, he is one of five former technology-portfolio managers and analysts whose careers crossed paths at SAC during the late 1990s, when the hedge fund posted annual returns averaging almost 60 percent, and who have since been linked to the government investigation.

“Steinberg is another domino that has fallen in a path that leads to a central person at SAC,” said John Coffee Jr., a professor at Columbia Law School. “He’s one of the few that had direct communications with Cohen.”

Steinberg was indicted Friday by a federal grand jury on five counts of conspiracy and securities fraud. He is accused of being part of a conspiracy that began in late 2007 and continued until 2009. The U.S. said he received and traded on illegal tips from Jon Horvath, a former analyst at SAC, on technology companies Dell and Nvidia.

Steinberg pleaded not guilty. Barry Berke, Steinberg’s lawyer, said his client did nothing wrong.

SAC, which manages $15 billion, said Steinberg always conducted himself “professionally and ethically” while at the firm.

Cohen hasn’t been accused of wrongdoing.

Steinberg worked at SAC’s Sigma Capital Management unit and was one of 15 portfolio managers handling technology, media and telecommunications stocks before he was put on paid leave in September.

He oversaw as much as $200 million in gross assets, a relatively small amount in a firm where some portfolio managers handle as much as $1 billion, according to the people, who asked not to be identified because they didn’t want to publicly discuss their relationship with Steinberg or SAC.

Around the time when he joined, SAC had about 50 employees managing about $450 million, mainly Cohen’s own money, and was starting to transition from a proprietary-trading firm to a hedge fund with outside clients.

As part of the process, the firm was expanding its fundamental research and organizing money managers along industries, according to SAC marketing documents dated 2011.

Steinberg was part of a group of technology portfolio managers and analysts that included David Ganek, who around the turn of the century ran the largest technology-stock portfolio after Cohen; his analyst Anthony Chiasson; and portfolio manager Richard Grodin, who had joined SAC around the time Cohen started the firm, the people said.

Richard Choo Beng Lee, a Duke University graduate, worked as analyst for Steinberg out of SAC’s West Coast offices.

Lee in 2009 pleaded guilty to securities fraud and cooperated in the investigation of Galleon Group co-founder and convicted insider-trader Raj Rajaratnam. It was the first time a former SAC employee was linked to the government’s probe.

“Lee has been and continues to be a willing cooperator with the government to the best of his abilities,” said Lee’s lawyer, Jeffrey Bornstein.

Grodin was among the individuals and firms that were subpoenaed in 2010 as part of the Galleon Group case, a person familiar with the investigation said at the time. He hasn’t been charged with wrongdoing.

The offices of Ganek and Chiasson’s hedge fund, Level Global, were raided by the FBI in 2010, which led to the firm’s liquidation the following year.

Chiasson was found guilty in December 2012 of conspiracy to commit securities fraud and is waiting to be sentenced. He faces as long as 25 years in prison.

Ganek, who was named as an unindicted co-conspirator in Chiasson’s trial, wasn’t charged in that case.

Steinberg emerged in September as an unindicted co-conspirator in an insider-trading scheme involving Horvath, whom he supervised.

Steinberg was put on leave after Horvath pleaded guilty to passing nonpublic information to his portfolio manager, who he said traded on the tips.

On Aug. 26, 2008, two days before Dell was set to report second-quarter earnings, Horvath emailed Steinberg and another portfolio manager to warn that the computer maker would miss earnings estimates.

“I have a 2nd hand read from someone at the company,” Horvath said in the email, which provided details on gross margins, expenditures and revenue. “Please keep to yourself as obviously not well known.”

Steinberg responded: “Yes normally we would never divulge data like this, so please be discreet. Thanks.”

Steinberg was led into a Manhattan federal courtroom in handcuffs. At the 30-minute hearing, his bail was set at $3 million. He was set to be released Friday.

He faces as long as 20 years in prison if convicted.