Saturday, 23 August 2014
Last updated 1 day ago
Oct 29 2013 | 7:46am ET
SAC Capital Advisors is on the verge of finalizing a proposed settlement with federal prosecutors.
The deal, under which SAC is expected to pay a fine of between $1 billion and $1.8 billion, could be announced as soon as this week, CNBC reports. That would be well ahead of the Nov. 18 deadline set by the U.S. Attorney's Office in Manhattan.
The basic terms of the deal are set, including a guilty plea on insider-trading charges by the hedge fund. What, exactly, that will mean for SAC is unclear. Several technical issues still need to be resolved.
Whatever the precise terms, SAC will have to pay a large fine and will likely be barred from managing outside capital for a period of time. According to CNBC, the firm could become a family office, or it could close—and transfer its remaining capital, most of which belongs to firm founder Steven Cohen, and its staff to the new firm.
It is also unclear whether the deal will resolve the Securities and Exchange Commission's civil lawsuit against Cohen himself for failure to supervise. The SEC is seeking a personal ban from the securities industry for Cohen for failing to stop insider-trading at the firm, which has seen a half-dozen former employees plead guilty to the crime.
Nov. 18 is the date on which SAC portfolio manager Michael Steinberg, a longtime friend of Cohen's, will go on trial for insider-trading. According to the New York Post, SAC's settlement and admission of guilt would not be admissible at that trial, but could put heavy pressure on Steinberg to cut a deal.
Steinberg has pleaded not guilty and SAC has stood behind him.
Aug 4 2014 | 7:42am ET
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The July/August 2014 issue is our largest in years—filled with the best trading strategies and stories from 43 years of being the primary publication for commodity, stock, options and forex traders.
The Alpha Pages Editor's Note