SAC Sued By Drug Co. Investors In Insider-Trading Case

Apr 15 2013 | 11:31am ET

An investor in one of the drug companies whose shares were allegedly traded illegally by SAC Capital Advisors has sued the hedge fund.

The Birmingham Retirement & Relief System suit, filed in Manhattan federal court on Friday, seeks class-action status, alleging that SAC's trades hurt Wyeth LLC's shares. BR&RS is an investor in the pharmaceutical company.

Former SAC portfolio manager Mathew Martoma has been accused of trading on confidential information about a Wyeth and Elan Corp. Alzheimer's drug trial, saving SAC some $276 million. Martoma has pleaded not guilty, but SAC has agreed to settle Securities and Exchange Commission allegations about his actions for $606 million—a deal that has been put on hold by a federal judge.

SAC would not admit or deny wrongdoing under that settlement.

The BR&RS lawsuit would cover all investors who bought Wyeth shares between July 21 and 29, 2008. It also names SAC founder Steven Cohen, several SAC units, Martoma and Martoma's alleged source, Sidney Gilman. Gilman has pleaded guilty and is cooperating with prosecutors.

"Any liability to these plaintiffs is fully discharged by our settlement with the SEC, and this lawsuit presents no new liability to SAC," a spokesman for the hedge fund said.

The lawsuit is the second would-be class action over Martoma's trades to hit SAC: In January, six Elan shareholders sued the hedge fund.

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