Hedge fund giant SAC Capital to pay $1.8B penalty

By Marcy Gordon

Associated Press

Published: Monday, Nov. 4 2013 2:56 p.m. MST

At least eight former SAC employees have previously been criminally charged with insider trading and most have pleaded guilty. One is a former portfolio manager at an SAC affiliate who was accused of using illegal tips about an experimental Alzheimer's drug to net more than $276 million for his fund and others.

Of the roughly $15 billion in assets that SAC managed as of earlier this year, about half belonged to Cohen and his employees. The rest was client money.

Cohen wasn't named as a defendant in the case. He was repeatedly referenced in court papers at the "SAC owner" who "enabled and promoted" insider trading practices.

As part of the deal, prosecutors said they will not assert claims for financial recovery against any present owner or shareholder of the SAC defendants for insider trading on behalf of the SAC through last Dec. 21, except for criminal fines or forfeiture claims related to insider trading profits or avoided losses. The agreement also reserved the right of prosecutors to charge others criminally.

Gordon reported from Washington. Associated Press Writer Tom Hays in New York contributed to this report.

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