Woman Who Helped Bring Down SAC Avoids Jail

Oct 27 2014 | 6:11am ET

A former hedge fund manager has been spared prison for assisting in the government’s insider-trading investigation against SAC Capital Advisors.

Reema Shah pleaded guilty two-and-a-half years ago to swapping tips and illegally trading on them with former Yahoo! Inc. executive Robert Kwok. She had faced up to 25 years in prison, but was hit with only two years’ probation and a $500,000 fine. She must also pay $11,750 in forfeitures and $377,000 to the Securities and Exchange Commission.

Prosecutors cited her “remarkable cooperation” for the leniency, noting that her assistance helped win the convictions of several people, as well as that of SAC, which last year pleaded guilty to insider-trading charges. Shah secretly recorded more than 700 phone calls and wore a wire in meetings with other suspects, beginning to cooperate just weeks after she was approached by the Federal Bureau of Investigation in 2009.

Shah worked at Ameriprise Financial’s RiverSource Investments unit, where she managed a hedge fund and several mutual funds.

Kwok was also sentenced to two years’ probation, in 2012.


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