Saturday, March 16, 2013

Small Enough to Jail

Well sometimes a financial company isn't too big to jail, so we can create a category of Small Enough to Jail I guess.  The latest is SAC Capital

Jon Horvath, a former analyst at SAC Capital Advisors LP who pleaded guilty to passing illegal tips to one manager at the hedge fund, also funneled inside information to another supervisor, U.S. regulators said in a lawsuit that may help accelerate the massive criminal investigation of SAC and its founder, Steven A. Cohen.

SAC yesterday agreed to pay a record $616 million to settle SEC allegations that Sigma and another affiliate, CR Intrinsic Investors, made illegal trades using nonpublic information. SAC and the affiliates didn’t admit or deny wrongdoing in the accord. Cohen hasn’t been sued personally by the SEC or charged with a crime.  

Horvath’s illegal tips helped SAC earn more than $6.4 million in profit and avoided losses, according to the SEC complaint filed yesterday.  The SEC filing cited some of the same internal e-mails that were included as evidence in the criminal trial against two of Horvath’s co-defendants, Level Global Investors LP co-founder Anthony Chiasson and former Diamondback Capital Management LLC portfolio manager Todd Newman. They were convicted in December and await sentencing.

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