SAC Capital Advisors, a $14 billion hedge fund, announced in a client conference call that federal securities regulators are preparing to file a civil lawsuit against the firm. The anticipated lawsuit arises from another criminal insider trading prosecution against a former SAC Portfolio Manager for allegedly corrupting a doctor who provided confidential information on a drug trial. According to prosecutors, the data provided allowed SAC to garner gains and avoid losses of $276 million, which was described by the authorities as the most lucrative insider trading scheme ever unearthed.
SAC, which has been the subject of improper trading investigations for years, received notice of the possible enforcement action by the Securities and Exchange Commission on November 20th, which is the same date the former Portfolio Manger was arrested.
SAC head, Steven A. Cohen, who is not personally accused of any wrongdoing, stated in an investor call that “[w]e take these matters very seriously, and I am confident that I acted appropriately.” (“S.E.C. Weighs Suit Against SAC Capital,” New York Times Dealbook, November 28, 2012).