SAC Affiliate Settles SEC Insider Trading Charges For $600 Million York (HedgeCo.Net) – The US courts have approved a $600 million fine to settle SEC charges that hedge fund advisory firm CR Intrinsic Investors participated in an insider trading scheme involving a clinical trial for an Alzheimer’s drug, Reuters reports. CR Intrinsic is an affiliate of SAC Capital.

Matthew Martoma, a former portfolio manager CR Intrinsic Investors was found guilty and is awaiting sentencing. “Martoma is scheduled to be sentenced on July 28. Court probation officers have recommended a prison term of up to 20 years, which would be a U.S. record for insider trading.” Reuters says.

“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,” said George S. Canellos, Acting Director of the SEC’s Division of Enforcement.

Ronald Dennis, who worked at the hedge fund advisory firm agreed to be barred from the securities industry and pay more than $200,000 to settle the SEC’s charges.

Steven A Cohen’s hedge fund SAC Capital Advisors has agreed pay approximately $2 billion. Another SAC affiliate, Sigma Capital, agreed to pay nearly $14 million to settle insider trading charges.

Alex Akesson
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