Home > Finance, Law > SAC to Pay $1.2B Penalty for Insider Trading

SAC to Pay $1.2B Penalty for Insider Trading

Tuesday, November 5th, 2013 Leave a comment Go to comments

SAC Capital Advisors, run by billionaire investor Steven A. Cohen, has agreed to pay a record $1.2 billion fine and to plead guilty to five counts of insider trading, thereby becoming the first major Wall Street firm to admit criminal misconduct in a generation.

The penalty adds to the $616 million that SAC has said it would pay to the SEC for similar civil charges. The deal marks a major victory for the government and the climax of an 11-year investigation that started with the simple question: how come SAC’s investment returns were so good?

Here are more details about the deal via DealBook:

The guilty plea and fine paid by SAC are part of a broader plea deal that will impose a five-year probation on the fund and require it to hire an outside monitor. SAC must also terminate its business of managing money for outside investors, a largely symbolic blow, as it already faces an exodus of client money.

It will still most likely continue to manage Mr. Cohen’s vast fortune, a move that would help maintain its influence on Wall Street.

 

Source: After a Decade, SAC Capital Blinks (DealBook)

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