The settlement between the US Securities and Exchange Commission and SAC Capital Advisors in the amount of US$602 million is now being questioned. One of the major issues is the avoidance of any admission of fault by SAC Capital.
This becomes a major issue for the CEO of the megafund, Steven A. Cohen. According to Judge Victor Marrero, "There is something counterintuitive and incongruous about settling for US$600 million if it truly did nothing wrong."
In response, SAC Capital lawyer Martin Klotz said the money is to remove the issue 'hanging above our heads' and avoid protracted and prolonged litigation.
According to Bloomberg report, the settlement agreement still needs to be approved by the court to be made final.
The settlement is related to the ongoing case against ex-SAC Capital portfolio manager Matthew Martoma and Dr. Sidney Gilman. The SEC accused Martoma of illegally accepting confidential information from Gilman on the clinical trials of Elan Corp and Wyeth. The insider trading case was filed against the CR Intrinsic Unit of SAC Capital related to the two pharmaceutical companies clinical trials.
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