Hedge-fund group SAC Capital Advisors LP and federal prosecutors have agreed in principle on a penalty exceeding $1 billion in a potential criminal settlement that would be the largest ever for an insider-trading case, according to people familiar with the matter. The payment by SAC, run by star manager Steven A. Cohen, is expected to be roughly $1.2 billion to $1.4 billion, according to these people. The penalty means SAC would pay the U.S. government a total of nearly $2 billion, including a $616 million penalty the firm agreed to in a civil insider-trading settlement with the Securities and Exchange Commission in March…Prosecutors are working with the SEC in negotiations with SAC over how long the firm and Mr. Cohen would potentially refrain from managing outside capital. Mr. Cohen has agreed with prosecutors to sit out for a period of time, according to the people familiar with the matter. [WSJ]
After months of fighting the government’s insider trading case tooth and nail, the hedge fund SAC Capital Advisors is leaning toward admitting criminal wrongdoing and agreeing to pay a record financial penalty to resolve the charges, according to two people briefed on the deliberations…In agreeing to have SAC plead guilty and pay the hefty fine, SAC’s owner, Steven A. Cohen, would be seeking to put his legal woes behind him in the hopes of salvaging his business. Once he resolved the government’s case, Mr. Cohen would look to transform SAC into a “family office” that would manage Mr. Cohen’s own wealth. [Dealbook, earlier]
Got a prison sentence coming your way? Excited about the prospect of sleeping in bunk beds again but nervous about just about everything else? If your experience proves to be anything like that of former CEO Qwest CEO Joseph Nacchio, fret not: you’re actually in for a pretty good time. Read more »
Guy Who Had Two Ladies Doing His Insider Trading Bidding At The Same Time Was This Close To Nabbing A ThirdBy Bess Levin
Remember Thomas Ammann (pictured at right)? For those who need a refresher, he was an investment banker who met a woman (Jessica Mang, center) at a London nightclub in 2009, started seeing her “at least once a week,” on days he wasn’t with his other girlfriend (Christina Weckworth, left), and then, when Mang asked to crank things up a notch on the relationship in the form of a romantic getaway, told her he’d take her to Seychelles on the condition she’d first use her own money to trade on material non-public information he’d obtained from his job at Mizuho International about Canon’s purchase of OCE NV and then give him half the profits. Mang naturally jumped at the chance to take things to the next level (“I thought [him entrusting me with such an important task] was a massive leap in commitment…I thought, you know, this is a relationship that’s going to go somewhere,” she later told a London criminal court), as did Weckworth when she was asked to do the same, but not in exchange for a free holiday. Anyway, Ammann ended up pleading guilty to “insider trading and encouraging the women to commit insider trading” last year and today was sentenced to 32 months in prison and a fine of 94,568 pounds ($151,820). (The women themselves were somehow found not guilty.) But the most delightful part of this story, reported by Bloomberg this morning? Read more »
“In an effort to boost morale, Mr. Cohen arranged in July for a local “Super Duper Weenie” hot-dog truck to swing by SAC’s office and dispense free food. — WSJ, September 24, 2013
July 23, 2013
The place: SAC Capital Headquarters. The time: middle of the trading day. The mood: Not great.
An IM chime rings in Steve Cohen’s ear. He turns to the far left of his seven screens, minimizes one or two computer programs, and sees that it’s from SAC president Tom Conheeney.
“U got 1 sec?” Conheeney asks.
“Is it impt?” the Big Guy responds.
Across the office, Conheeney looks up and catches Cohen’s eye. He starts to type a response, stops, and holds down the Backpace button. Types again, Backspace again. Type, Backspace. Type, Backspace. It’s a delicate matter. The SAC president eventually settles on a simple, “Yeah. It kinda is.”
“Fine,” Cohen replies. “My office, 30 seconds.” Read more »
SAC Trial Pushed Back To January So Lawyer Involved In Two Cases Doesn’t Have To Start Each Day’s Proceedings Hunched Over Making The “1 Minute Sign” As He Tries To Catch His BreathBy Bess Levin
A federal judge on Tuesday pushed back the insider trading trial of former SAC Capital Advisors portfolio manager Mathew Martoma to January 6. U.S. District Judge Paul Gardephe delayed the trial, originally scheduled for November 4, at the request of Martoma’s lawyer, Richard Strassberg, who is taking part in another trial starting this week…Strassberg, Martoma’s lawyer, is also representing Bank of America Corp’s Countrywide unit in a trial over allegations that it defrauded Fannie Mae and Freddie Mac with shoddy home loans. Because of proceedings in the Countrywide case, Strassberg arrived, out of breath, in Gardephe’s crowded courtroom an hour after the scheduled 12:30 p.m. start of a hearing. “Yes, I have arrived,” Strassberg said, when the court reporter asked if he was present. Gardephe took the bench a few minutes later, and Strassberg informed him that he had to return to the courtroom of U.S. District Judge Jed Rakoff, who is presiding over the Countrywide case, by 2 p.m. [Reuters]