SAC Forced To Retract Statement After Plea Deal

Nov 5 2013 | 9:12am ET

It did not take long for SAC Capital Advisors to violate its $1.8 billion plea agreement with federal prosecutors.

The hedge fund formally agreed yesterday morning to plead guilty to securities and wire fraud charges. As part of the deal, SAC stipulated that it "has accepted this agreement and decided to plead guilty because it is in fact guilty. By entering this plea of guilty, each of the SAC entity defendants waives any and all rights to withdraw its plea or to attack its conviction, either on direct appeal or collaterally."

Despite that agreement, SAC's own statement to the press following the inking of the deal insisted that the firm "has never encouraged, promoted or tolerated insider trading." That claim could be seen as a violation of its plea deal.

Hours later, the hedge fund issued a second statement in which the offending line was deleted. "Even one person crossing the line into illegal behavior is one too many and we greatly regret this conduct occurred," the firm said in the new statement.

SAC agreed to pay $1.8 billion—minus the $616 million it paid earlier this year—and to shut down its investment-advisory business as part of the plea agreement. The firm will also hire a compliance monitor.


In Depth

Q&A: Decathlon Capital On Revenue-Based Alternative Lending

Oct 30 2017 | 3:49pm ET

The explosion in private credit activity since the end of the financial crisis is...

Lifestyle

CFA Institute To Add Computer Science To Exam Curriculum

May 24 2017 | 9:25pm ET

Starting in 2019, financial industry executives sitting for the coveted Chartered...

Guest Contributor

CAIS: How Technology is Disrupting the Alternative Investment Industry

Nov 7 2017 | 5:35pm ET

If there’s one thing that alternative investment professionals can agree on, it...