The SEC announced Friday it settled–for a cool $600M–insider trading charges with CR Intrinsic, an affiliate of billionaire Steve Cohen‘s hedge fund. See Steve Cohen‘s Hedge Fund To Pay Over $600M To Settle Insider Trading Charges. Trader Mathew Martoma still faces criminal charges over an alleged tip on clinical trial results for an Alzheimer’s drug from Elan Pharmaceuticals. Sigma Capital Management (another Cohen affiliate) also settled for about $14 million insider trading related to Dell and Nvidia stock. …read more Source: FULL ARTICLE at Forbes Latest
(Spencer Platt/Getty Images)Mathew Martoma walks with his wife Rosemary and his lawyer after leaving Manhattan federal court on Jan. 3 in New York City. Martoma worked for CR Intrinsic Investors, which Friday agreed to pay more than $600 million to settle insider-trading charges.
By SARAH SKIDMORE
Two affiliates of SAC Capital Advisors, the hedge fund run by billionaire Steven Cohen, will pay more than $614 million in what federal regulators are calling the largest insider trading settlement ever.
The Securities and Exchange Commission charged CR Intrinsic Investors with insider trading in 2012, alleging that portfolio manager Mathew Martoma illegally obtained confidential details about an Alzheimer’s drug trial from a doctor before the final results went public and traded on that information. The SEC said Friday that the fund agreed to pay more than $600 million to settle the charges. The parties neither admit nor deny the charges.
The SEC‘s complaint alleged that Sidney Gillman, a doctor who moonlighted as a medical consultant, tipped drug safety data and negative drug trial results to Martoma two weeks before developers Elan Corp. and Wyeth made those results public in 2008. Martoma and CR Intrinsic then caused several hedge funds to sell more than $960 million in Elan and Wyeth securities in a little more than a week.
Regulators added SAC Capital Advisors and four hedge funds managed by CR Intrinsic and SAC Capital as defendants, saying they each received ill-gotten gains from the scheme.
“The historic monetary sanctions against CR Intrinsic and its affiliates are a sharp warning that the SEC will hold hedge fund advisory firms and their funds accountable when employees break the law to benefit the firm,” George S. Canellos, acting director of the SEC‘s Division of Enforcement, said in a statement.
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The settlement is subject to the approval of a U.S. District Court judge. It does not settle charges against Martoma, whose case is still in litigation.
Also Friday, the SEC settled charges against Sigma Capital Management for $14 million. Sigma allegedly profited illegally from early information about the earnings of two technology companies.
The cases stem from a long-running probe of insider trading by hedge funds, many of which are affiliated with SAC Capital. The government has targeted multiple employees of the Stamford, Conn.-based hedge fund, though no charges have been brought against Cohen.
SAC said in a statement Friday that it is happy to put these matters with the SEC behind it.
“This settlement is a substantial step toward resolving all outstanding regulatory matters and allows the firm to move forward with confidence,” the company said. “We are committed to continuing to maintain a first-rate compliance effort woven into the fabric of the firm.”
A hedge fund company will pay more than $600 million in what federal regulators are calling the largest insider trading settlement.
The Securities and Exchange Commission said Friday that CR Intrinsic Investors has agreed to settle charges that it traded on non-public information about trials of an Alzheimer’s drug.
The commission also settled charges against Sigma Capital Management for $14 million. Sigma allegedly profited illegally from early information about the earnings of two technology companies.
The cases stem from a long-running probe of insider trading by hedge funds, many of which are affiliated with SAC Capital Partners. CR Intrinsic was an affiliate of SAC. A separate SAC affiliate fund allegedly benefited from Sigma’s actions.
The Securities and Exchange Commission (SEC) announced it reached a settlement on insider trading charges with SAC Capital affiliate CR Intrinsic. The SEC has stepped up the pressure on the hedge fund run by billionaire Steve Cohen, getting the largest settlement ever for an insider trading case on Friday, in which portfolio manager Mathew Martoma was accused of getting a tip from a doctor involved in the clinical testing of an Alzheimer’s drug. Another SAC Capital affiliate, Sigma Capital Management, settled on Friday for a more modest sum related to insider trading purportedly executed by Jon Horvath in Dell and Nvidia stock. …read more Source: FULL ARTICLE at Forbes Latest
An affiliate of SAC Capital Advisors LP agreed to pay more than $600 million to settle U.S. Securities and Exchange Commission charges that it participated in an insider trading scheme, the largest settlement of its kind.
The affiliate, CR Intrinsic Investors, had been charged with insider trading in November, when the SEC said one of its portfolio managers, Mathew Martoma, illegally obtained confidential details about a clinical trial for an Alzheimer’s drug.
The SEC also said another hedge fund firm with ties to SAC, Sigma Capital Management, agreed to pay nearly $14 million to settle a separate insider trading case.
The U.S. Securities and Exchange Commission (SEC) said today that the CR Intrinsic unit of hedge fund SAC Capital has agreed to pay $600 million to settle insider trading charges brought by the SEC against the firm. Another unit of SAC Capital, Sigma Capital Management, has agreed to pay a fine of nearly $14 million to settle charges that it engaged in insider trading in shares of Dell Inc. (NASDAQ: DELL) and Nvidia Corp. (NASDAQ: NVDA) in 2008 and 2009.
A former SAC Capital, Jon Horvath, pleaded guilty to insider trading in September and has been cooperating with the investigations into SAC Capital and its affiliates.
Today’s settlement with SAC includes nearly $275 million in disgorgement, $52 million in interest payments, and another $275 million in penalties. The SEC‘s acting director of enforcement said:
The historic monetary sanctions against CR Intrinsic and its affiliates are sharp warning that the SEC will hold hedge fund advisory firms and their funds accountable when employees break the law to benefit the firm.
Both settlements are subject to the approval of the federal district court.
