Shareholders of drug maker Elan Corp. are urging the judge who is presiding over SAC Capital Advisors’ insider trading case to mandate a guilty plea from the hedge fund firm.
Bloomberg Businessweek reported that Elan shareholders told U.S. District Judge Laura Taylor Swain Friday that they are “crime victims” of Connecticut-based SAC’s insider scam, and are asking the judge to reject any settlement Connecticut-based SAC Capital has reached with prosecutors unless it pleads guilty to the conduct alleged in their case.
Elan’s shareholders filed a consolidated complaint earlier this year against SAC, claiming that the hedge fund owe them as least $549 million as a result of insider trades. Former SAC portfolio manager Mathew Martoma was accused of helping SAC earn $276 million using confidential information regarding shares of Elan and Wyeth, another pharmaceutical company.
While SAC would need to pay an approximate $1.2 billion settlement fine and its founder Steve Cohen will also be barred from managing external capital for a period of time, it was reported last week by eVestment that the firm is expected to please guilty to securities fraud.
A grand jury charged SAC 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 SEC also charged Cohen for failing to prevent insider trading at his firm.
SAC had about $14 billion in total assets under management as of July 1.