SAC Capital to Pay Largest Insider Trading Penalty–$1.8 Billion


Hedge fund SAC Capital will plead guilty to criminal and civil charges related to insider trading and pay an historic $1.8 billion penalty, Politico reports. The proposed agreement would address charges federal prosecutors filed in July, when U.S. Attorney Preet Bharara in New York City described the Connecticut-based firm as a “veritable magnet for market cheaters” that “seeded itself in with corrupt traders.” The firm has been accused of using inside information to trade pharmaceutical and tech stocks. The settlement is the largest-ever financial penalty for insider trading. It follows years of government investigations into the high profile fund and founder Steven Cohen as part of a crackdown on insider trading. A criminal probe continues. Bharara said “individual guilt is not the whole of our mission,” adding, “sometimes blameworthy institutions need to be held accountable too. No institution should rest easy in the belief that it is too big to jail. That is a moral hazard that a just society can ill-afford.”

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