Hedge Fund SAC Capital Admits To Insider Trading
NEW YORK (CBSNewYork/AP) -- One of the world's most powerful hedge funds pleaded guilty this week to insider trading charges.
As WCBS 880's Irene Cornell reported Saturday, Peter Nussbaum, the general counsel for SAC Capital billionaire owner Steven Cohen, admitted in U.S. District Court Friday that the giant hedge fund is guilty of the crime. Cohen was not charged personally.
Hedge Fund SAC Capital Admits To Insider Trading
As he put it, "We express deep remorse for the conduct that happened in our watch."
Assistant U.S. Attorney Arlo Devlin Brown told U.S. District Judge Laura Swain there was nothing accidental about the pervasive insider trading. He told the court that SAC Capital deliberately hired portfolio managers based on their good contacts with insiders and many public companies, and then encouraged them to get an edge on the market aggressively.
The case is costing SAC Capital a total of $1.8 billion in fines.
SAC Capital has been at the center of one of the biggest insider-trading fraud cases in history. Four employees have already been criminally charged with insider trading, and two of them have pleaded guilty. And an SAC affiliate has agreed to pay $615 million to settle SEC charges.
Cohen, who lives in Greenwich, Conn., is one of the highest profile figures in American finance and one of the richest men in America. He is among the handful of upper-tier hedge fund managers on Wall Street who pull in about $1 billion a year in compensation.
An SAC portfolio manager pleaded not guilty last year to charges he earned $9 million in bonuses after persuading a medical professor to leak secret data from an Alzheimer's disease trial.
The criminal charges against SAC Capital were filed in July, less than a week after Cohen was accused of wrongdoing in a civil case brought by the Securities and Exchange Commission. The SEC alleged he failed to stop insider trading at his firm.
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