Wednesday, 23 July 2014
Last updated 1 hour ago
Dec 10 2012 | 5:46am ET
Federal investigators are looking into SAC Capital Advisors' trading in two companies as the insider-trading probe of the hedge fund continues to expand.
The Federal Bureau of Investigation and Securities and Exchange Commission are eyeing SAC's moves in shares of InterMune and Weight Watchers International, Bloomberg News reports. The SEC told SAC two weeks ago that it would likely face SEC civil charges, after a former portfolio manager was arrested on insider-trading charges.
Like the stocks in the case against Mathew Martoma, InterMune is a pharmaceutical company. Authorities are looking at SAC's trades in the stock in the first half, around the time a pulmonary drug received an unexpectedly favorable regulatory review. The hedge fund then dumped the shares—in time to avoid a big drop when another lung treatmen failed to pass regulatory muster. Former SAC portfolio manager Nikej Shah was involved in at least some of the InterMune transactions, according to Bloomberg.
SAC's successful 2011 bet on Weight Watchers is also under scrutiny. The hedge fund bought up more than two million shares in the first quarter of 2011, watched them double, and then sold nearly all of them just before the stock price slumped on word of higher spending.
Neither SAC nor founder Steven Cohen have yet been accused of any wrongdoing. But published reports indicate that the SEC hopes to extend fraud charges to Cohen, and that the FBI sought Martoma's cooperation in building a case against Cohen.
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…