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Alternative Market Briefing

SAC will plead guilty to fraud following year long criminal probe

Wednesday, October 30, 2013

Bailey McCann, Opalesque New York:

Connecticut-based SAC Capital, managed by Steven Cohen and the subject of a year long probe by the Securities and Exchange Commission (SEC) will plead guilty to fraud as part of what looks to be a multi-billion dollar settlement with the regulator. According to a report from the Wall Street Journal on Tuesday, the full terms of the settlement will be released next week, and will include admission of guilt to charges of insider trading.

The firm has been the subject of a yearslong investigation by the regulator, and has already paid some of the largest fines in history for insider trading. The payout associated with this settlement is expected to top those, amounting to billions of dollars.

Reuters reports that Cohen will submit the plea in an effort to put the case behind him and continue winding down his business. Negotiations have been underway between the SEC and Cohen for weeks over the specific penalties, which may also include giving the government any ill-gotten trading profits. Current estimates put the settlement at $1.2bn, slightly less than the $1.8bn originally sought by regulators.

Along with the payout, SAC will be banned from managing outside money, but the firm will be allowed to continue ......................

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