SAC Capital Advisors, one of the nation's largest hedge funds, has agreed to pay
$1.8 billion, the largest insider-trading penalty in history, to resolve insider-trading
charges.
Under the agreement, which is subject
to court approval, SAC will plead guilty to each count in an indictment filed in
July charging SAC with securities fraud in connection with a large-scale, insider-trading
scheme.
The agreement, announced Monday, imposes a $1.8 billion
financial penalty on SAC, split between a $900 million fine in the criminal
case and $900 million in a civil money laundering action filed by the government
along with the criminal charges. It also provides that SAC will no longer
accept outside investor funds and will shut down operations as an investment
adviser.
“As I said four years ago, at the time
of our first major insider trading arrests, greed sometimes is not good,”
Manhattan U.S. Attorney Preet Bharara said. “And there are at least 75
convicted insider trading defendants who, today, would likely agree. But
individual guilt is not the whole of our mission. Sometimes, blameworthy institutions
need to be held accountable too. No institution should rest easy in the belief
that it is too big to jail.”
Bharara said that the settlement “is
the just and appropriate price for the pervasive and unprecedented
institutional misconduct that occurred here.”
Federal prosecutors charged in the
indictment that from 1999 through at least 2010, numerous employees of the SAC
obtained and traded on material, non-public information that they weren’t
permitted to have, or recommended trades based on such information to SAC
portfolio managers.
While the agreement would resolve the
criminal charges against the SAC, it doesn’t provide individuals with immunity
from prosecution.
Federal prosecutors haven’t yet been
able to make a case against Steven A. Cohen, the 57-year-old billionaire who
owns SAC, according to The New York Times article “SAC Capital Agrees to Plead
Guilty to Insider Trading.”
Bharara has criminally charged
eight former SAC employees, six of whom have pleaded guilty, the article said.
