SAC Capital settlement clears U.S. court hurdle

Wed Nov 6, 2013 12:34pm EST
 
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By Nate Raymond

NEW YORK (Reuters) - A federal judge said he will approve part of a $1.2 billion settlement with Steven A. Cohen's SAC Capital Advisors on Wednesday, putting the U.S. government a step closer to finalizing the insider trading agreement.

At a hearing in Manhattan on Wednesday, U.S. District Judge Richard Sullivan said he would sign off on a $900 million judgment in a civil forfeiture action filed earlier this year against SAC Capital.

An order by Sullivan a day earlier raised questions about whether he would approve the judgment, after the judge cited recent judicial "debate" about how courts are to review regulatory settlements.

But Sullivan on Wednesday questioned whether he was even needed for the process. To the extent his signature was required, the judge said he thought it was clear the ability of the court to scrutinize the civil end of the settlement was "minimal."

"I think the inquiry here is a limited one," Sullivan said.

Under the judgment that Sullivan said he would sign, SAC Capital would get credit for $616 million it already agreed to pay to the U.S. Securities and Exchange Commission to resolve related insider trading charges.

A separate part of the deal announced on Monday calls for $900 million in criminal penalties and would have to be approved by U.S. District Judge Laura Taylor Swain.

SAC Capital has agreed to plead guilty to five fraud counts in connection with a wide-ranging insider trading scheme prosecutors said spanned more than a decade. A plea hearing was set for Friday before Swain.   Continued...

 
An exterior view of the headquarters of SAC Capital Advisors, L.P. in Stamford, Connecticut, in this picture taken December 13, 2010. REUTERS/Mike Segar