Investors in two pharmaceutical companies whose shares were allegedly illegally traded by SAC Capital Advisors have asked a federal judge to reject any deal that doesn't include an admission of the wrongdoing they have alleged.
SAC has reached a settlement agreement with federal prosecutors that will be announced later today. Reports of the firm's negotiations with the U.S. Attorney's office in Manhattan indicated that SAC was loathe to admit wrongdoing in the case of its trading in Elan Corp. and Wyeth LLC shares, as former portfolio manager Mathew Martoma, who made the trades, has pleaded not guilty and is set to go on trial next year.
The plea agreement includes at least one securities-fraud guilty plea, but it is not yet clear what it covers. And if it doesn't cover Elan and Wyeth, the lawyers leading the class-action lawsuits against SAC want it junked.
"The plea being negotiated will allow defendants to plead guilty and pay a fine in excess of $1 billion without admitting liability for insider trading in Elan or Wyeth," plaintiffs lawyer Ethan Wohl wrote in a Friday court filing to U.S. District Judge Laura Taylor Swain, who is overseeing the SAC case. "A plea agreement on those terms, if tendered to the court, should be rejected."
Wohl wrote that Elan and Wyeth investors are "crime victims" of SAC's alleged fraud.