November 7, 2013
On November 4, 2013, the United States Attorney for the Southern District of New York Preet Bharara announced an agreement (the "Agreement") to resolve insider trading charges against four companies (the "SAC Companies") that are responsible for the management of a group of affiliated hedge funds:
- S.A.C. CAPITAL ADVISORS, L.P. ("SAC Capital LP"),
- S.A.C. CAPITAL ADVISORS, LLC ("SAC Capital LLC"),
- CR INTRINSIC INVESTORS, LLC ("CR Intrinsic"), and
- SIGMA CAPITAL MANAGEMENT, LLC ("Sigma Capital")
Subject to Court approval, the Agreement contemplates the SAC Companies pleading guilty to each count in the Indictment charging securities fraud and wire fraud in connection with an alleged insider trading scheme from 1999 through at least 2010, in which numerous employees obtained and traded on material, non-public information or recommended trades based on such information to SAC Portfolio Managers or the SAC Owner.
Finally, the Agreement imposes the largest insider trading penalty to date of $1.8 billion, which comprises a $900 million fine in the criminal case, and a $900 million forfeiture judgment in a civil money laundering and forfeiture action. If approved, the Agreement will result in the SAC Companies and their affiliates no longer accepting outside investor funds and ceasing investment adviser operations.
The BrokeAndBroker Blog offers its readers the full-text of the Indictment, Civil Complaint, and Plea Agreement: