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SAC Capital to Pay $616 Million for Insider Trading

“SAC Capital Advisors LP, the hedge fund run by billionaire Steven A. Cohen, will pay a record $616 million to settle U.S. regulatory claims that two of its units engaged in insider trading.

Settlement of the civil allegations against the units doesn’t preclude the Securities and Exchange Commission from pursuing Cohen himself in the future, George Canellos, the agency’s acting enforcement director, said on a conference call with reporters today. The investigation by the SEC continues, as does the criminal case against former SAC portfolio manager Mathew Martoma.

“There is no way of predicting what they intend to do,” saidJacob Frenkel, a former SEC enforcement lawyer who is now a partner at Shulman Rogers Gandal Pordy & Ecker PA in Potomac, Maryland. “When the agency is so obviously pursuing someone, and when we do not know what cooperators are saying, there are just too many unknowns.”

Cohen was linked in November to alleged illegal trades done by Martoma in a case that U.S. prosecutors described as the most-lucrative insider-trading scheme they’ve ever uncovered, with profits and averted losses of $276 million. SAC manages $15 billion out of StamfordConnecticut, 60 percent of which is Cohen’s and his employees’ money. Cohen hasn’t been sued personally by the SEC or charged with a crime.

Boesky, Milken…”

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