SAC's Plotkin Faces Insider-Trading Probe

Dec 19 2012 | 12:36pm ET

Another top SAC Capital Advisors portfolio manager may find himself ensnared in the insider-trading probe surrounding the hedge fund.

Authorities are looking at the trading of Gabriel Plotkin, SAC's top consumer and retail trader. In particular, they are examining his trades in Weight Watchers International last year, Reuters reports.

Investigators' interest in SAC's Weight Watchers trades was revealed earlier this month; the hedge fund bought more than two million shares in the first quarter of 2011, watched them double in price and then sold nearly all of them just before the price slumped on news of higher spending.

Plotkin, who works in New York at SAC's Sigma Capital Management unit, has not been accused of any wrongdoing. SAC defended their manager, whose team made between $150 million and $200 million in profits for the firm last year, saying he "has built a successful career on a commitment to sound fundamental research."

It is unclear whether investigators are looking at any of SAC's 10 other consumer and retail portfolio managers, some of whom may also have traded in Weight Watchers shares.

Plotkin's name first came up during the trial of Level Global Investors co-founder Anthony Chiasson and former Diamondback Capital Management portfolio manager Todd Newman, who were convicted this week of insider-trading. Another SAC portfolio manager, Michael Steinberg, who was named an unindicted co-conspirator in the Chiasson-Newman trial and who has been on leave from SAC since September, e-mailed Plotkin and a former SAC analyst, Jon Horvath, who has pleaded guilty to insider-trading, in 2008. Plotkin and Horvath had a disagreement on Dell Inc., and Steinberg said that firm founder Steven Cohen "asked me to get the two of you to compare notes."

Investigators are also looking into SAC's trading of Elan Corp., InterMune Inc. and Wyeth shares. Former SAC portfolio manager Mathew Martoma was arrested last month and charged with illegal trading in Elan and Wyeth, and investigators may also be looking at SAC head trader Phillipp Vilhauer, who executed an Elan trade at Cohen's behest. They are also looking at InterMune trades made by former portfolio manager Nikej Shah, as well as seeking to build a case against Cohen himself.


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