Prosecutors Urge OK On SAC Deal As Firm Picks Compliance Consultant

Apr 4 2014 | 10:18am ET

SAC Capital Advisors has found its new compliance czar, federal prosecutors said yesterday.

The hedge fund, which is becoming a family office and will change its name to Point72 Asset Management on Monday, has named Bart Schwartz its independent compliance consultant, the U.S. Attorney's office in New York said in a court filing. SAC had agreed to appoint such an outside overseer as part of its plea deal with prosecutors to insider-trading charges.

In the filing, prosecutors urged U.S. District Judge Laura Taylor Swain to accept that plea agreement, which will see SAC pay $1.8 billion in fines and cease to manage outside money. SAC's guilty plea is contingent on the approval of the pact, as is Schwartz's appointment.

"The financial penalty being sought is steep but fair: It represents an appropriate punishment in light of the breadth and duration of the criminal conduct at SAC Capital, and deters similar misconduct at other institutions," prosecutors Antonia Apps, Arlo Devlin-Brown and John Zach wrote. "That criminal conduct included (but is not limited to) the actions of eight SAC employees who have either pled guilty or been found guilty at trial of engaging in insider trading."

Swain will consider the criminal half of the deal on Thursday. In November, another federal judge approved the $900 million civil portion of the settlement.

Schwartz, a former federal prosecutor, is now a compliance consultant at Guidepost Solutions. In that role, he's worked with Bernard Madoff feeder funds, the United Arab Emirates and New York's public transit agency.


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