Hedge Fund Pleads Guilty, but Tycoon Gets Off
Firm hit with record fine after 'unprecedented' insider trading
By Kevin Spak, Newser User
Posted Nov 5, 2013 11:15 AM CST
This Friday, July 26, 2013, file photo shows the Greenwich, Conn., estate belonging to billionaire hedge fund owner Stephen Cohen, founder of SAC Capital Advisors.   (AP Photo/Vincent T. Vuoto, File)

(Newser) – SAC Capital pleaded guilty to all five counts in the damning criminal complaint against it yesterday, agreeing to a total of $1.8 billion in penalties, the largest haul ever for an insider trading case. The plea marks the end of an 11-year case, and marks the first time "in a generation" that a Wall Street firm has confessed to criminal conduct, the New York Times reports. But prosecutors weren't able to lay a hand on the real apple of their eye, SAC founder Stephen A. Cohen.

Sources tell the Wall Street Journal that, barring new evidence, Cohen will never be charged personally with a crime, and though SAC will now be barred from managing money from outside investors, it will likely continue managing Cohen's massive fortune—and hence continue to be a market force. Traders speculate that Cohen, meanwhile, will simply found a new company to manage client money. Asked if they were disappointed, prosecutors defended the fines as "very substantial." SAC, meanwhile, released a statement decrying the "handful" of "wrongdoers" who had pleaded guilty.

View 1 more image
More From Newser
My Take on This Story
To report an error on this story,
notify our editors.
Hedge Fund Pleads Guilty, but Tycoon Gets Off is...
Show results without voting
You Might Like
Showing 3 of 14 comments
Nov 7, 2013 10:47 AM CST
"Hedge Fund Pleads Guilty, but Tycoon Gets Off" TOO BIG TO FAIL, TOO RICH TO JAIL
Nov 6, 2013 10:23 PM CST
Huge companies suck money out of countries. then the C.E.O.s suck the money out of their own companies. That's how it usually goes.
Nov 5, 2013 6:55 PM CST
Mr. Cohen got exactly what he expected (give or take a few hundred million). Trading on inside information is stealing from the others he is buying or selling to who aren't privy to his knowledge. He literally stole billions that way. His company was the biggest hedge fund around. His genius (if you could call it that) was betting that in case the company was caught, he would escape personal indictment with the majority of his wealth intact. For him, it was the ultimate hedge, and he won. This is just another case of the government going for the easy win and touting it as though the system worked. It didn't.