Monday, November 4, 2013

SAC Capital to Plead Guilty to Charges of Insider Trading

According to CNN, SAC Capital has agreed to pay a $1.8 billion fine and plead guilty to criminal insider trading charges. 
In addition, prosecutors say SAC will close its investment advisory business, meaning it will no longer manage money for outside investors. The deal still allows the firm to operate as a "family office," with Cohen and others at SAC investing their own money.

Cohen is one of the country's most famous hedge fund managers, with a net worth estimated at $9.4 billion in September. He could still face criminal charges of his own since the agreement does not include any immunity for individuals at the firm.

Prosecutors accused SAC in their indictment of fostering a culture of insider trading "that was substantial, pervasive, and on a scale without known precedent." The indictment excerpts a number of e-mails and instant messages from SAC traders suggesting they had illicit information from corporate insiders.

"What SAC Capital's plea demonstrates is that cheating and breaking the law were not only permitted, but allowed to persist," FBI Special Agent in Charge April Brooks said. "It was nothing short of institutional failure."

The deal still awaits approval from a judge. Preet Bharara, U.S. Attorney for the Southern District of New York, said the government's investigation remains ongoing.
The entire CNN article is available here.

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