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SAC Cap Given Ultimatum to Settle Criminal Charges

Oct 08, 2013
Jing Chen

Prosecutors have given SAC Capital an ultimatum to settle criminal charges against the Connecticut-based hedge fund.

Financial Times reported that SAC has until November to resolve criminal charges stemming from insider trading allegations or risk paying more than the current $2 billion settlement offer.

The article said that the November deadline ties in with the start of the criminal trial against SAC portfolio manager Michael Steinberg, who has pleaded not guilty to accusations that he traded shares of Dell and Nvidia after receiving confidential information. Authorities have told SAC lawyers that the price of the settlement to resolve the criminal charges would increase after the trial.

According to eVestment, SAC lawyers argued for a lower settlement amount last month at a meeting at the U.S. attorney’s office, and also pushed that the separate $616 civil regulatory fine the firm agreed to pay earlier this year be deducted from the criminal sanction

SAC Capital was charged in July with wire fraud and four counts of securities fraud for allegedly allowing insider trading to go unchecked from 1999 through at least 2010. The Securities and Exchange Commission also charged SAC founder Steve Cohen for failing to prevent insider trading at his firm.

Cohen has since denied the charges and maintains that he and his firm behaved appropriately.

SAC had about $14 billion in total assets under management as of July 1.

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