Thursday, 24 July 2014
Last updated 14 hours ago
Oct 25 2011 | 8:57am ET
The Financial Industry Regulatory Authority has referred at least 19 suspicious trades by SAC Capital Advisors to the Securities and Exchange Commission over the past decade, trades on which the hedge fund giant earned at least $14 million.
One of the 19 referrals has led to a second SEC probe into potential insider-trading at the firm: SAC's 2009 investment in Cougar Biotechnology just months before Johnson & Johnson announced it would acquire the company.
Many of the trades referred by FINRA involved biotechs, including Genentech, United Therapeutics and ViroPharma Inc., Bloomberg News reports. SAC is also under investigation for possible insider-trading of MedImmune Inc. shares.
"Every day our firm transacts in thousands of securities and, given this level of activity, it is not surprising that we would be included in a small percentage of FINRA referrals," SAC spokesman Jonathan Gasthalter told Bloomberg. "No one at FINRA has ever contacted the firm, spoken with our investment professionals or reviewed our research in connection with these matters. We have experienced inquiries by the SEC over the years and cooperated fully, without any negative finding or charge."
The FINRA referrals are at the center of Sen. Charles Grassley's investigation of the SEC; the ranking Republican on the Senate Finance Committee has reviewed about 20 referrals related to SAC trades.
Most of the 19 referrals—11—cited trades occurring more than five years ago, putting them outside of the statute of limitations.
The FINRA referrals also cite several other hedge funds whose trades raised the self-regulatory organization's eyebrows. Bridger Management also turned a profit on one trade made by SAC, and Millennium Partners and Tokum Capital Management, like SAC, made suspicious trades in Third Wave Technologies shares in 2008.
Jul 8 2014 | 10:48am ET
The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…