Judge accepts SAC guilty plea, $1.2 billion payout for fraud

Thu Apr 10, 2014 12:48pm EDT
 
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By Nate Raymond

NEW YORK (Reuters) - SAC Capital Advisors' $1.2 billion criminal settlement for insider trading received final court approval on Thursday, as a U.S. judge accepted a guilty plea from the hedge fund firm run by billionaire Steven A. Cohen.

At a hearing in Manhattan federal court, U.S. District Judge Laura Taylor Swain accepted SAC Capital's guilty plea to fraud charges

Thursday's settlement includes a $900 million fine. To resolve criminal and civil probes into insider trading, SAC Capital has agreed to pay more than $1.8 billion in total.

The U.S. Department of Justice has called the accord the largest insider trading settlement in U.S. history.

"These crimes clearly were motivated by greed, and these breaches of the public trust require serious penalties," Swain said. "The defendants' crimes were striking in their magnitude and strikingly indicative of a lack of respect for the law."

SAC Capital also agreed to be placed on probation for five years, and employ a compliance consultant, former federal prosecutor Bart Schwartz.

The sentencing marks the end of an era for SAC Capital, a hedge fund that last year managed $15 billion but found itself in federal investigators' cross-hairs. Eight employees have pleaded guilty or been convicted at trial for insider trading.

An indictment unveiled in July alleged systemic insider trading took place at SAC Capital involving the stocks of more than 20 publicly-traded companies from 1999 through 2010.   Continued...

 
An exterior view of the headquarters of SAC Capital Advisors, L.P. in Stamford, Connecticut July 25, 2013. REUTERS/Michelle McLoughlin