Hedge Fund to Pay Record $614M for Insider Trading
SAC Capital agrees to settle with the SEC
By Neal Colgrass, Newser Staff
Posted Mar 15, 2013 2:00 PM CDT
S.A.C. Capital Partners headquarters is shown, Thursday, Feb. 10, 2011 in Stamford, Conn.   (AP Photo/Mark Lennihan)

(Newser) – Two affiliates of a major hedge fund agreed today to pay $614 million in the biggest-ever insider trading settlement on Wall Street, the New York Times reports. One affiliate of SAC Capital, CR Intrinsic, agreed to pay $600 million after a worker was accused of using confidential data on drug makers Elan and Wyeth to make trades. That worker still faces criminal and civil charges. In the smaller case, Sigma Capital Management approved a $14 million payment over charges of insider trading on Dell and Nvidia stocks.

Now the SEC is trumpeting the settlements: "The historic monetary sanctions ... are sharp warning that the SEC will hold hedge fund advisory firms and their funds accountable," said an official. SAC also spun the tale happily, calling the settlement "a substantial step toward resolving all outstanding regulatory matters." And the hedge fund will pay the bill through its management company, thereby leaving investors off the hook. (Is this a newly inspired SEC? The commission recently accused Illinois of deceiving investors and suspected insider trading in the big Heinz deal.)

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Showing 3 of 15 comments
Mar 16, 2013 12:44 PM CDT
I wonder how many of those clients were elected politicians. They love to get insider tips and deny any part of it.
Mar 16, 2013 9:44 AM CDT
That's what happens when you remove a financial firewall like Glass-Steagall, a regulatory law that keeps commercial and investment stocks/bonds separate.
Mar 16, 2013 1:33 AM CDT
All of their assets should be freezed and they should go to jail like everyone else who insider trades. I'm tired of these f*ckers getting away with murder!