SAC Capital $1.8 billion penalty approved
Aaron Smith, 10 April 2014
A federal judge on Thursday approved a $1.8 billion settlement resulting from the guilty plea of hedge fund operator SAC Capital on charges related to insider trading by its employees. The firm, now known as Point72, reached the settlement last November with federal prosecutors, citing the firm for failing to prevent its employees from engaging in the illegal activity.
Judge Laura Swain of the U.S. DIstrict Court in New York said the crimes committed “were striking in magnitude and strikingly indicative of their disrespect for the law.”
The judge said the fine exceeds court guidelines for crimes of this nature, but added that the settlement was reached “to deter others from engaging in insider trading in the future.”
SAC Capital will be credited for a penalty of $616 million that it already agreed to pay the Securities and Exchange Commission, according to federal prosecutors. That figure will be subtracted from the $1.8 billion penalty agreed upon Thursday, for a resulting sum of $1.184 billion.
