The hedge fund founded by Greenwich billionaire Steven Cohen has agreed to plead guilty to a charge of insider trading and pay a whopping $1.2 billion in fines and penalties.
According to reports, the plea will close a federal investigation into the operations of SAC Capital Advisors of Stamford, founded and run by Cohen. The plea agreement is to include a five-year probation on the fund, requiring SAC to no longer manage money for outside investors, although the firm is expected continue managing Cohen’s estimated fortune of $14 billion.
The $1.2 billion penalty announced on Monday is on top of the $616 million in insider trading fines that Cohen's firm agreed to pay to federal regulators earlier this year.
Investigators reportedly said the plea agreement indicates cheating by the firm was allowed to persist over several years.
In a statement SAC Capital reportedly said that it would take “responsibility for the handful of men who pleaded guilty and whose conduct gave rise to SAC’s liability. The tiny fraction of wrongdoers does not represent the 3,000 honest men and women who have worked at the firm during the past 21 years. SAC has never encouraged, promoted or tolerated insider trading.”