SAC: federal grand jury indicts hedge fund for insider trading
Heidi Moore, 26 July 2013
A federal grand jury has indicted SAC Capital, the embattled hedge fund that has been pursued by financial authorities for years, for insider trading after regulators failed to charge its powerful founder, Steven A Cohen.
The US attorney who brought the charges, Preet Bharara, also hit the firm with civil money-laundering charges that would require the firm to forfeit potentially billions of dollars in assets.
A 41-page indictment alleges that SAC, founded in 1992, maintained an elite group that has traded on insider information since 1999.
SAC is also alleged to have hired portfolio managers specifically for their insider contact in the industries in which they traded, and failed to raise red flags when insider information was suggested as the basis for a trade. The indictment marks the culmination of a six-year investigation by Bharara. The government pursued an investigation against Cohen but apparently dropped its attempt to bring charges last month.
