Judge OKs smaller of two insider trading settlements for SAC
NEW YORK, April 1
NEW YORK, April 1 (Reuters) - A judge in New York approved one of two proposed settlements between units of Steven A. Cohen's $15 billion hedge fund SAC Capital Advisors and the U.S. Securities and Exchange Commission over civil charges related to insider trading.
The roughly $14 million settlement is between the SEC and SAC's unit Sigma Capital Management, where a former analyst, Jon Horvath, admitted to trading on non-public information on Dell Inc and Nvidia Corp.
In the case, the SEC sued Sigma Capital for not exercising proper control over its employees to prevent illegal activity. Sigma settled without admitting or denying wrongdoing. The approval was made without a hearing.
Michael Steinberg, a portfolio manager at Sigma and Horvath's former boss, was arrested on Friday, the same day the settlement was approved, and charged with insider trading in the same two technology stocks.
A spokesman for SAC Capital declined to comment, as did a lawyer representing Sigma in the case.
The settlement's approval by U.S. District Judge Harold Baer followed a courtroom surprise on Thursday in the other case the SEC filed against a unit of the SAC, which has been dogged by multiple insider trading allegations over the last several years.
A spokesman for the SEC did not immediately respond to a request for comment.
U.S. District Judge Victor Marrero held back on approving a massive $602 million settlement between the SAC unit CR Intrinsic and the SEC over concerns related to the SEC's policy of letting defendants settle charges without admitting or denying wrongdoing.
In the CR Intrinsic case, the SEC accused the unit of similarly failing to keep proper controls in place after a former portfolio manager was criminally charged last year with insider trading in two drug stocks, Elan and Wyeth, which is now owned by Pfizer.
Prosecutors charged Mathew Martoma in November with raking in $276 million in illegal profits from trades in the two stocks based on information he got from a doctor with knowledge of a drug trial the companies were running. Martoma pleaded not guilty, and is awaiting trial.
Martoma's lawyer did not immediately respond to a request for comment.