SAC Affiliates Settle Insider-Trading Charges for $614 Million

March 15, 2013 – In The News
Los Angeles Times

Two affiliates of embattled hedge fund SAC Capital Advisors agreed to pay $614 million to settle insider-trading charges in what regulators said was the largest-ever penalty for such cases.

Company founder, Steven A. Cohen, was not accused of wrongdoing and not named in the settlements. The case has fueled speculation that Cohen may be the ultimate target of the investigation by the Securities and Exchange Commission (SEC) and federal prosecutors. While the SEC said it’s investigation is continuing, a spokesman for SAC Capital said Cohen “has done nothing wrong.”

Ernest Badway, a former SEC enforcement attorney, said the settlements seemed to indicate the government's probe into SAC Capital is progressing.

"No one writes a check for $600 million unless there are serious issues," said Badway, now practicing at the firm Fox Rothschild in New York and New Jersey." It sounds to me like people are talking, and they are gaining more information."

The SEC declined to say what might come next in its efforts to combat insider trading. But agency officials hoped the settlements would send a strong signal to Wall Street firms that they should better police their employees.