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Alternative Market Briefing

SEC mulls distribution of $602m SAC settlement to victims

Friday, October 31, 2014

Komfie Manalo, Opalesque Asia:

The U.S. Securities and Exchange Commission said it plans to distribute the $602m settlement money it received from Steven Cohen’s hedge fund SAC Advisors to people who claim they were victimized by former SAC portfolio manager Mathew Martoma’s illegal insider trading.

According to a report by Reuters, Ethan Wohl, the lead attorney for investors who are seeking part of the settlement money, said negotiations are now on-going between the SEC and investors who held shares of two drug stocks involved in Martoma’s 2008 illicit trades.

The investors of Elan, now owned by Perrigo Company Plc and Wyeth, now owned by Pfizer Inc, claim they are entitled to some of the settlement money. Those investors have also sued SAC Capital and are seeking $2bn in damages.

Presiding U.S. District Judge Victor Marrero must approve the SEC's distribution plan before parties concerned can decide how to divide the funds among claimants. SAC is now called Point 72 Asset Management. A division of the hedge fund, CR Intrinsic Investors, agreed to pay the $602m in March 2013 to settle the SEC's civil case against it after Martoma was caught making the illegal trades.

In April this year, SAC Capital was again ordered to pay $1.2bn......................

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