Chalk one up to the 99% Percent. A multi-billion dollar hedge fund, SAC Capital Advisors L.P., was indicted today on numerous criminal charges. From The New York Times:
After years of winning criminal convictions against employees of SAC Capital Advisors, federal prosecutors on Friday confronted SAC itself.
In a brief proceeding in Federal District Court in Lower Manhattan, the hedge fund was arraigned on a raft of criminal insider trading charges, making it the first large American company to face an indictment in more than a decade. The appearance came a day after prosecutors announced the case against SAC, run by the billionaire Steven A. Cohen, calling it a “veritable magnet of market cheaters.”
...
In the indictment, authorities argued that SAC and its units permitted a “systematic” insider trading scheme to unfold from 1999 to 2010, activity that generated hundreds of millions of dollars in profit for the firm.
Separate from these charges, 6 traders at SAC Capital have already pled guilty to individual insider trading-type charges, so the company is kinda effed.
Let's hope demand that this be only the beginning of more criminal accountability from the finance sector.
Update 1:
SAC Capital seems nice. From their Wikipedia page:
The company is incorporated offshore in Anguilla, British West Indies,[5] and its trading offices are located in Stamford, Connecticut and New York City. SAC also maintains satellite offices in San Francisco, Hong Kong, Boston, Shanghai, Tokyo, Sydney, Frankfurt, Rio de Janeiro, London, among others.[2] The firm employs approximately 1,000 people, of which about 300 are investment personnel and 40 are staffed in legal and compliance.[1] SAC's management fee include 3% of AUM and 50% of the annual returns—the highest in the industry.[citation needed] Forbes listed SAC founder Steven Cohen's estimated net worth to be $8.0 billion as of 2008.[6]
http://en.wikipedia.org/...
Update 2:
Evidence behind these charges includes wiretaps. From Bloomberg:
Insider trading evidence against SAC Capital Advisors LP includes court-authorized wiretaps, a U.S. prosecutor said at the $14 billion hedge fund’s arraignment in federal court in Manhattan.
“The discovery will be voluminous, including a large number of electronic recordings, including electronic messages, instant messages, court-authorized wiretaps and consensual recordings,” Assistant U.S. Attorney Antonia Apps told U.S. District Judge Laura Taylor Swain today about the pretrial evidence-gathering process. “In short, a tremendous volume.”
http://www.businessweek.com/...
Update 3:
Could SAC Capital bring down others when they fall? MorganStanley and J.P. Morgan are continuing to do business with the indicted firm! Also from Bloomberg:
Bank of America Corp., JPMorgan (JPM) Chase & Co. and Morgan Stanley are among Wall Street banks continuing to trade with SAC Capital Advisors LP after U.S. prosecutors indicted the hedge fund for insider trading, according to four people briefed on the matter.
The firms are still providing trading and prime brokerage services to the hedge fund founded by Steven A. Cohen, said the people, who asked not to be identified talking about a specific client. The government has no plan to freeze fund assets, prevent redemptions or affect interests of SAC counterparties, Stamford, Connecticut-based SAC said yesterday after the government’s criminal charges were made public.
http://www.bloomberg.com/...