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Prosecutors close to charging SAC Capital Advisers

July 24, 2013 at 10:52 AM   |   Comments

NEW YORK, July 24 (UPI) -- The U.S. Justice Department is preparing to file charges against SAC Capital Advisors as early as this week, sources close to the issue said.

The charges, which could include variations of securities fraud or insider trading, could be derailed if the firm strikes an eleventh hour deal with prosecutors, but there are no signs that any deal is in the works, The Wall Street Journal reported Wednesday.

SAC, named its billionaire founder Steven A. Cohen, is based in Stamford, Conn., and is one of the most successful hedge funds in the country.

Cohen started the fund with $20 million of his own money in 1992. He is now worth at least $8 billion.

SAC Advisors managed about $15 billion at the start of the year, but clients have been pulling out in light of the incendiary headlines concerning the firm and its traders, four of whom have pleaded guilty to insider trading, while two others have pleaded not guilty.

On Friday, Cohen was charged with neglecting his duties a a financial manager by failing to police his own firm. The Securities and Exchange Commission's charges say it should have been obvious to Cohen that insider trading was occurring under his watch.

SAC in a 46-page report given to employees said the charges against Cohen were "baseless."

The Journal said that no financial firms have survived a federal indictment. If found guilty, "commercially, it's over. You're a family office, not an investment adviser," attorney Leor Landa told the Journal.

"If SAC is convicted criminally, reputation-ally [Cohen] is destroyed," said Thomas Zaccaro, a former assistant U.S. attorney in Manhattan and former chief trial counsel with the SEC in Los Angeles.

© 2013 United Press International, Inc. All Rights Reserved. Any reproduction, republication, redistribution and/or modification of any UPI content is expressly prohibited without UPI's prior written consent.
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