Hedge Fund Agrees to Record Fine for Insider Trading

Banking, finance, and taxes

Published: March 15, 2013 2:21 pm

Last Updated: April 27, 2020 10:50 pm

The U.S. Securities and Exchange Commission (SEC) said today that the CR Intrinsic unit of hedge fund SAC Capital has agreed to pay $600 million to settle insider trading charges brought by the SEC against the firm. Another unit of SAC Capital, Sigma Capital Management, has agreed to pay a fine of nearly $14 million to settle charges that it engaged in insider trading in shares of Dell Inc. (NASDAQ: DELL) and Nvidia Corp. (NASDAQ: NVDA) in 2008 and 2009.

A former SAC Capital, Jon Horvath, pleaded guilty to insider trading in September and has been cooperating with the investigations into SAC Capital and its affiliates.

Today’s settlement with SAC includes nearly $275 million in disgorgement, $52 million in interest payments, and another $275 million in penalties. The SEC’s acting director of enforcement said:

The historic monetary sanctions against CR Intrinsic and its affiliates are sharp warning that the SEC will hold hedge fund advisory firms and their funds accountable when employees break the law to benefit the firm.

Both settlements are subject to the approval of the federal district court.

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