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Judge Questions SAC Cap Insider Trading Settlement

Mar 31, 2013
Jing Chen

A federal judge is questioning hedge fund firm SAC Capital Advisors’ $602 million insider trading settlement.

Financial Times reported that Judge Victor Marrero needs more time to decide whether to approve Connecticut-based SAC’s settlement, which means that the firm would not have to admit to insider trading charges. The settlement is considered the largest ever in an insider trading case.

eVestment reported in November that the Securities and Exchange Commission charged former CR Intrinsic—which is a SAC Capital affiliate-- portfolio manager Mathew Martoma of allegedly making over $250 million for the firm using insider information he received regarding an Alzheimer disease drug trial.

Martin Klotz, the lawyer for SAC, said the firm settled because it “want[s] to get on with business [without] the threat of litigation hanging over [them],” according to the Financial Times article.

SEC defended the settlement, claiming that the penalty amount SAC would pay equals to the illegal gains the firm made.  

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