SAC Capital nears deal with US prosecutors on insider trading

City A.M. Reporter
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AL between SAC Capital and US prosecutors to resolve a criminal insider trading case against the firm could come in a few days, a source familiar with the matter said yesterday.

Any potential deal between Steven A Cohen’s SAC Capital and federal authorities would likely involve some admission of liability by the firm and a payment of more than $1bn (£619m), the source said.

A settlement, which has been under negotiations for several weeks, would be a blow to Cohen and his reputation as one of the greatest stock traders of his generation. But people familiar with the billionaire trader say he has been telling people he is looking to put the nearly seven-year long investigation of his firm behind him.

The payment to the government would be structured as both penalty and forfeiture of trading profits allegedly derived from improper trading by Cohen's hedge fund, the person familiar with the matter said. SAC Capital is in the process of returning much of the $5bn in outside money it manages for others. About $6bn of the firm’s money belongs to Cohen and his employees.

Spokesmen for prosecutors, the Federal Bureau of Investigation and SAC Capital declined to comment.