Hedge Fund Giant to Pay $1.8B Insider Trading Charge
SAC Capital Advisors will plead guilty to criminal fraud charges, stop investing money for others and pay $1.8 billion — the largest financial penalty in history for insider trading — to resolve criminal and civil claims against the hedge fund giant, the government announced Monday.
U.S. Attorney Preet Bharara told a news conference the settlement should send the message that “no institution should rest easy in the belief that it is too big to jail.” He said it was up to the courts to decide whether to accept the plea deal. No date for a plea was immediately set.
The government said (pdf) in a letter to judges presiding over Manhattan cases that the “proposed global resolution” of the criminal and civil cases against SAC Capital Advisors and related companies also includes an agreement that SAC will cease operating as an investment adviser and will not accept any additional funds from third-party investors.
Before Monday’s news, SAC had pleaded not guilty to the charges in July.
The company will pay a $900 million fine and forfeit another $900 million to the federal government. The government called the penalties “steep but fair” and “commensurate with the breadth and duration of the charged criminal conduct.”