June 18 A New York court designated a pension
fund as the lead plaintiff in a lawsuit filed by shareholders of
Elan Corp against SAC Capital, a court filing showed, as
the hedge fund continued to face varied legal challenges over
Pension fund City of Birmingham Retirement and Relief System
has been named as the lead representative party, who will act on
behalf of other co-litigants in directing the lawsuit, according
to a court order on Monday.
The lawsuit, which was filed by investors in Elan's American
depositary receipts, complained that SAC reaped millions in
trading profit based on inside information.
The legal challenge posed by Elan shareholders is another
burden for SAC as it already faces redemption requests from its
investors and also a U.S. government lawsuit.
In the lawsuit filed by federal prosecutors, the court has
already set a Nov. 4 start for the criminal trial of Mathew
Martoma, a former portfolio manager at SAC Capital Advisors, on
insider trading charges.
Martoma, one of nine former employees of billionaire Steven
Cohen's hedge fund named in a government crackdown on insider
trading, will be the first to face trial. Cohen has not been
accused of any wrongdoing.
Prosecutors say Martoma helped CR Intrinsic Investors, an
SAC fund, avoid $276 million in losses in 2008 by recommending
that it sell shares of Elan Corp and Wyeth, now owned by Pfizer
Inc, based on a doctor's tips about poor drug trial
People familiar with the fund have previously told Reuters
that outside investors asked to redeem up to $4 billion in the
second quarter, on top of the $1.7 billion in first-quarter
The case is David E. Kaplan et al vs SAC Capital Advisors,
Case No. 12-9350, U.S. District Court, Southern District of New
York. The other case is U.S. v. Martoma, U.S. District Court,
Southern District of New York, No. 12-cr-00973.