Reaching a plea deal with federal prosecutors, the hedge fund firm SAC Capital Advisors has agreed to plead guilty to insider trading, pay a $1.8 billion fine and end its investment advisory business.
“U.S. prosecutors on Monday filed a letter describing the deal to the judges in a pair of cases – one criminal, the other a civil forfeiture action – against SAC Capital stemming from a massive insider trading investigation. The judges would have to approve the deal.”
As Scott reported back in July, federal officials alleged that during a decade starting around 1999, the company, which controlled $15 billion in assets at one point, “solicited nonpublic information and used it to trade stock in publicly traded companies.”
Also back in July, the Securities and Exchange Commission charged the fund’s billionaire founder Steven A. Cohen of failing to prevent insider trading. Those charges are still pending.
NPR’s Jim Zarroli reports that SAC was one of the most prominent hedge funds in the country.
“The company had dozens of portfolios managed by people with ties to different industries,” Jim told our Newscast unit. “U.S. officials say they regularly traded stock based on illegally obtained information. Tips were also passed on to Cohen, who used it to trade for his own portfolio.”
The charges against Cohen are civil, not criminal.