Chicago-based independent futures brokerage and clearing firm R.J. O’Brien & Associates (RJO) has hired industry veteran Daniel Staniford as Executive Director, responsible for the firm’s institutional business development in New York and London.
Tuesday, 6 December 2016
Last updated 11 hours ago
Mar 15 2013 | 3:05pm ET
SAC Capital Advisors has agreed to pay more than $600 million to settle insider-trading charges.
Two SAC affiliates, CR Intrinsic Investors and Sigma Capital Management, have settled with the Securities and Exchange Commission for $614 million, the largest-ever settlement for insider-trading. The overwhelming bulk of the money will come from CR Instrinsic, which agreed to pay nearly $275 million each in disgorgement and penalties, and $51.8 million in prejudgment interest.
The SEC had accused SAC of trading on confidential information about Alzheimer's drug trials and technology stocks. The CR settlement covers the allegedly illegal trading at the heart of the criminal case against former portfolio manager Mathew Martoma, who has been criminally charged with insider-trading, and the Sigma settlement trades based on tips received by former analyst Jon Horvath, who pleaded guilty in a separate insider-trading case. Neither unit admitted or denied any wrongdoing.
“The historic monetary sanctions against CR Intrinsic and its affiliates are sharp warning that the SEC will hold hedge fund advisory firms and their funds accountable when employees break the law to benefit the firm,” said George Canellos, acting director of the SEC’s enforcement division.
"We are happy to put the Elan and Dell matters with the SEC behind us," SAC spokesman Jonathan Gasthalter said. "This settlement is a substantial step toward resolving all outstanding regulatory matters and allows the firm to move forward with confidence. We are committed to continuing to maintain a first-rate compliance effort woven into the fabric of the firm."
The deal does not necessarily mean the matter is entirely behind SAC, however. Bloomberg News reports that the settlement does not bar a case against firm founder Steven Cohen; both prosecutors and the SEC have been seeking to build such a case for months. Nor does it resolve the SEC's case against Martoma, who has pleaded not guilty and whose legal bills are being footed by SAC.
"SAC’s business decision to settle with the SEC in no way changes the fact that Mathew Martoma is an innocent man," his lawyer, Charles Stillman, said. "We will never give up our fight for his vindication."
Martoma is accused of getting tips about the clinical trials from Sidney Gilman, a doctor overseeing them who is now cooperating with prosecutors. The SEC’s complaint against CR Intrinsic, Martoma, and Gilman alleged that during phone calls arranged by a New York-based expert network firm for which Gilman moonlighted as a medical consultant, he tipped Martoma with safety data and eventually details about negative results in the trial about two weeks before they were made public in July 2008. Martoma and CR Intrinsic then caused several hedge funds to sell more than $960 million in Elan and Wyeth securities in a little more than a week.
Prosecutors said Martoma's scheme is the largest insider-trading scam in history.
The settlement still requires the approval of a federal judge.