The Herald Bulletin

Morning Update

Breaking News

July 26, 2013

Hedge fund pleads not guilty to US fraud charges

NEW YORK — Prosecutors said a large volume of evidence including electronic messages, court-ordered wiretaps and consensual recordings is stacked against a Connecticut-based hedge fund that pleaded not guilty Friday to criminal charges accusing it of letting insider trading flourish for more than a decade.

Assistant U.S. Attorney Antonia Apps told a federal judge in Manhattan that investigators had "voluminous" evidence against SAC Capital Advisors, a Stamford, Conn.-based firm owned by billionaire Steven A. Cohen.

She said the evidence included "electronic messages, instant messages, court-ordered wiretaps and consensual recordings."

The plea was entered by Peter Nussbaum, SAC's longtime general counsel, and came a day after the company was charged with wire and securities fraud, accused of making hundreds of millions of dollars illegally. Federal prosecutors described a culture at SAC that permitted, if not encouraged, insider trading.

Prosecutors said the victims were large companies whose inside information was stolen and traded upon. The next hearing was set for Sept. 24.

Outside court, lawyers for the company including Nussbaum declined to comment and paced on a sidewalk looking for cars to pick them up as the media followed.

SAC said in a statement after the charges were announced Thursday that it will continue normal operations. It said it "has never encouraged, promoted or tolerated insider trading and takes its compliance and management obligations seriously." The company declined through a spokesman to comment Friday.

Cohen has not been charged and was not in court Friday. He is referenced in court papers only as the "SAC owner" who "enabled and promoted" insider trading practices.

At a news conference Thursday, U.S. Attorney Preet Bharara said SAC "trafficked in inside information on a scale without any known precedent in the history of hedge funds."

"When so many people from a single hedge fund have engaged in insider trading, it is not a coincidence," the prosecutor said. "It is, instead, the predictable product of substantial and pervasive institutional failure."

He declined to comment on whether Cohen would be charged, saying: "I'm not going to say what tomorrow may or may not bring."

From 1999 to 2010, the company earned hundreds of millions of dollars illegally as its portfolio managers and analysts traded on inside information from at least 20 public companies, Bharara said.

The possibility that the criminal case could topple the firm, which once managed $15 billion in assets, led the prosecutor to note that the government was not seeking to freeze SAC's assets. Bharara added that prosecutors were "mindful to minimize risk to third-party investors."

Still, the government in one lawsuit sought SAC's forfeiture of "any and all" assets.

The charges came less than a week after federal regulators accused Cohen in a related civil case of failing to prevent insider trading at the firm. While the Justice Department's action targets SAC but not Cohen directly, the civil case brought by the Securities and Exchange Commission seeks to effectively shut him down by barring him from managing investor funds.

 

1
Text Only
Breaking News
  • news_homesickforprison.jpg Man said to be homesick for prison gets 3½ years

    An ex-con who spent most of his adult life behind bars on Thursday got what he said he wanted for robbing a suburban Chicago bank. The 74-year-old gets to go back to the place he called home — prison.

    April 17, 2014 1 Photo

  • Gay Marriage Utah [Duplicate] Judge asks pointed questions in gay marriage case

    A judge in Colorado who will play a pivotal role deciding whether gays should be allowed to wed in the United States asked pointed questions Thursday about whether Oklahoma can legally ban the unions.

    April 17, 2014 1 Photo

  • news_obamalocalschools.jpg Obama: 8 million signed up for health care

    Eight million people have signed up for health care through new insurance exchanges and the proportion of younger applicants has increased, President Barack Obama said Thursday.

    April 17, 2014 1 Photo

  • 0107 Super WAL-MART 1 Wal-Mart jumps into the money transfer biz, loudly

    The world's largest retailer introduced a new money transfer service Thursday that it says will cut fees for its low-income customers by up to 50 percent compared with similar services elsewhere.

    April 17, 2014 1 Photo

  • news_ukraineprotests.jpg Deal reached on calming Ukraine tensions

    Top diplomats from the United States, European Union, Russia and Ukraine reached agreement after marathon talks Thursday on immediate steps to ease the crisis in Ukraine.

    April 17, 2014 1 Photo

  • news_target.jpg Cyber cops: Target hackers may take years to find

    Secret Service investigators say they are close to gaining a full understanding of the methods hackers used to breach Target's computer systems last December.

    April 17, 2014 1 Photo

  • Evacuation came too late for many on sinking ferry

     An immediate evacuation order was not issued for the ferry that sank off South Korea's southern coast, likely with scores of people trapped inside, because officers on the bridge were trying to stabilize the vessel after it started to list amid confusion and chaos, a crew member said Thursday.

    April 17, 2014

  • 3 protesters killed in attack on Ukrainian base

    The turmoil in Ukraine dominated the European landscape Thursday, as three protesters were killed in a clash in southern Ukraine, high-level talks were held in Geneva and Vladimir Putin weighed in on his neighbor's future for hours from Moscow.

    April 17, 2014

  • news_marathonsecurity.jpg Boston Marathon organizers confident of safe race

    The arrest of a man with a rice cooker in his backpack near the Boston Marathon finish line led police to step up patrols Wednesday, while organizers sought to assure the city and runners of a safe race next week.

    April 17, 2014 1 Photo

  • news_diabetescomplications.jpg Study: Diabetic heart attacks and strokes falling

    In the midst of the diabetes epidemic, a glimmer of good news: Heart attacks, strokes and other complications from the disease are plummeting.

    April 17, 2014 1 Photo

Featured Ads
More Resources from The Herald Bulletin
AP Video
Parade
Magazine

Click HERE to read all your Parade favorites including Hollywood Wire, Celebrity interviews and photo galleries, Food recipes and cooking tips, Games and lots more.
Hyperlocal Search
Premier Guide
Find a business

Walking Fingers
Maps, Menus, Store hours, Coupons, and more...
Premier Guide
Helium debate
Helium
Front page
Poll

How well do you monitor your child's use of social media?

I do a good job
I check occasionally
Not well at all
     View Results