(Bloomberg) — SAC Capital Advisors LP will plead guilty to securities fraud as soon as today, the biggest hedge fund to resolve charges in the U.S. governments six-year crackdown on insider trading, according to a person familiar with the matter.
SAC, founded by Steven A. Cohen, 57, has been told it must pay a fine of $1.8 billion as part of any plea deal, people familiar with the matter have said. U.S. Attorney Preet Bharara has scheduled a press conference in New York at 1 p.m. to discuss a proposed resolution of the matter.
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The company, indicted earlier this year in Manhattan federal court, was accused of operating a conspiracy that stretched as far back as 1999, reaping hundreds of millions of dollars in illicit profit. Cohen wasnt charged and the Stamford, Connecticut-based firm had denied any wrongdoing.
The plea agreement reached in the past week between lawyers representing SAC and the U.S. Attorneys Office in Manhattan wont include an admission of promoting insider trading within the firm, CNBC reported, citing people familiar with the deal.
The $1.8 billion fine amounts to about $1.2 billion that would be paid as a result of the criminal probe by Bharara and includes the more than $600 million that SAC had already agreed to pay the U.S. Securities and Exchange Commission to settle a related suit.
Jim Margolin, a spokesman for Bharara, declined to comment. Jonathan Gasthalter, a spokesman for SAC and Cohen, didnt reply to an e-mail from Bloomberg News seeking comment.
Trials Pending
Two of Cohens most senior lieutenants to face charges will go on trial in the next three months.
Michael Steinberg, a money manager at SAC, is scheduled to go on trial later this month, accused of trading on inside tips on Dell Inc. and Nvidia Corp. The scheme generated $1.4 million in illicit profits, prosecutors said.
Prosecutors also charged Mathew Martoma, a former SAC money manager, with using illegal tips about an Alzheimers drug trial to help the firm make profits or avoid losses totaling $276 million by trading Elan Corp. and Wyeth LLC shares. Martoma pleaded not guilty and is scheduled to go to trial in January.
The U.S. called the case the largest insider-trading scheme in history.
Elan shareholders who sued SAC and Cohen for insider trading asked the judge presiding over the hedge funds criminal case to reject any accord SAC has reached with prosecutors unless it pleads guilty to the conduct alleged in their case.
The case is: U.S. v. SAC Capital Advisors LP, 13-CR-00541. U.S. District Court for the Southern District of New York (Manhattan).
