Hedge fund SAC Capital is indicted for alleged insider trading
Posted Jul 25, 2013 9:45 AM CDT
By Debra Cassens Weiss
SAC Capital Advisors has been charged with insider trading in an indictment that accuses the hedge fund of “institutional indifference” to wrongdoing.
The indictment, announced today, says the insider trading was “substantial, pervasive and on a scale without known precedent in the hedge fund industry,” report the New York Times DealBook blog and the Wall Street Journal (sub. req.).
Steven Cohen, the billionaire who owns the fund, was not charged. The Securities and Exchange Commission filed a civil action against him last week that alleged he failed to properly supervise his employees. The civil complaint seeks to bar him from the financial services industry.
According to the Times, “Thursday’s indictment against SAC itself represents a new phase" in the government's investigation of insider trading, which has resulted in 73 convictions or guilty pleas. "Criminal charges against large companies are rare," the Times says, "given the collateral consequences for the economy and innocent employees.” The story says the indictment “could deliver a death blow” if investors pull their money and trading partners stop doing business with the fund.