(Adds details from decision, background, case citation,
By Jonathan Stempel and Nate Raymond
NEW YORK, June 18 A U.S. judge on Wednesday
granted final approval to a $602 million insider trading accord
between a unit of billionaire Steven A. Cohen's SAC Capital
Advisors LP and the U.S. Securities and Exchange Commission.
In April 2013, U.S. District Judge Victor Marrero in
Manhattan had raised concerns about the accord with CR Intrinsic
Investors LLC because it contained language that did not require
the unit to admit or deny the regulator's charges.
Marrero had made approval contingent on the outcome of a
separate case involving a $285 million settlement between the
SEC and Citigroup Inc, which U.S. District Judge Jed
Rakoff, who sits on the same court, had in 2011 rejected.
On June 4, a federal appeals court voided that rejection
and returned the accord to Rakoff, saying it was improper for
judges to require the SEC to establish the truth of its
allegations as a condition of approvals.
In light of the reasoning in that decision, Marrero said he
was persuaded that the SEC settlement with CR Intrinsic was
"fair and reasonable."
But he said his delay in granting approval highlighted the
SEC's need to apply a "more rigorous inquiry" in using "neither
admit nor deny" provisions in cases such as CR Intrinsic, where
parallel criminal actions were pending.
Since April 2013, SAC agreed to pay $1.2 billion and plead
guilty to related criminal insider trading charges, while a jury
found former CR Intrinsic portfolio manager Mathew Martoma
guilty of insider trading.
Marrero, in his decision on Wednesday, said these changed
circumstances had cast the SEC's "neither admit nor deny"
settlement with CR Intrinsic in a "different light."
"In such instances, there may be value in a wait-and-see
approach before rushing into a settlement and hurrying to a
district court to seek approval of a proposed consent decree,"
SAC is now called Point72 Asset Management. Representatives
for Point72 and the SEC declined to comment.
The accord was one of two insider trading settlements the
SEC announced in March 2013 with SAC, totaling $615.7 million.
It accused CR Intrinsic of insider trading in Elan Corp and
Wyeth, now owned by Pfizer Inc, ahead of the release of
results of an Alzheimer's drug trial, resulting in $275 million
of improper gains.
Martoma is scheduled to be sentenced on July 28. Court
probation officers have recommended a prison term of up to 20
years, which would be a U.S. record for insider trading.
The case is SEC v. CR Intrinsic Investors LLC et al, U.S.
District Court, Southern District of New York, No. 12-08466.
(Reporting by Jonathan Stempel and Nate Raymond; Editing by
David Gregorio and Lisa Shumaker)