SAC Capital Advisors LP pleaded guilty Monday to insider trading in charges brought by the Department of Justice and will pay a $1.2 billion fine—the largest ever insider trading penalty.
U.S. Attorney Preet Bahrara's office in the Southern District of New York tweeted Monday morning: "SAC mgmt companies agree to plead guilty to all counts in crim indict, pay $1.8 billion, & terminate SAC Capital's investment advisory bus."
Bahrara called the penalties "steep but fair" and "commensurate with the breadth and duration of the charged criminal conduct."
The $1.2 billion penalty, which is on top of the $616 million in insider trading fines that SAC agreed to pay to federal regulators earlier this year, does not include civil charges brought by the Securities and Exchange Commission against SAC's founder, Steven Cohen. The SEC says that Cohen failed to supervise two senior employees and prevent them from insider trading under his watch, and the agency is seeking to bar Cohen from the securities industry.
While Cohen has yet to be charged criminally, the settlement with prosecutors includes the winding down of the firm as an investment advisor and the surrender of its SEC registration.
Cohen would still be allowed to manage his own money by running a family office, which the Wall Street Journal reported could happen in the near future. Cohen's firm, which managed $15 billion at the beginning of the year, is expected to manage the $9 billion that belongs to him and employees under the family office, the Journal said.
