SAC Capital Advisors Hit With Largest Insider Trading Fine Ever
SAC Capital Advisors, a hedge fund giant, will be $1.8 billion lighter in the pocketbook after being assessed the largest financial penalty ever levied for insider trading. Additionally, the company will plead guilty to criminal charges and stop investing money for others. The sanctions were announced by the government on Monday.
The fine breakdown goes like this. SAC will pay a $900 million fine to the government. An additional $900 million will be forfeited to the federal government, though that amount will be reduced by the $616 million the company had already agreed to pay to settle legal actions by the U.S. Securities and Exchange Commission.
The government acknowledged the penalties as “steep but fair and “commensurate with the breadth and duration of the charged criminal conduct.”
Not included in the deal was a civil action brought by the SEC against SAC’s founder, Steven A. Cohen. The lawsuit alleges he failed to prevent insider trading. For two decades the company has been poster child for hedge fund success, complete with gigantic bonuses for success and quick retribution for losses. With a personal net worth of $8.8 billion, Cohen is listed as the 40th-richest American and is among an elite group of hedge fund managers who have earned $1 billion in a year. (Derek Dowell – VNN) (Image: Flickr | srqpix)