SAC Capital Advisors LP, the hedge-fund firm led by billionaire Steven Cohen, has agreed to plead guilty to a federal indictment and pay $1.8 billion as part of a multiyear investigation into insider trading.
Cohen, who hasn’t been charged, faces an administrative action filed by the U.S. Securities and Exchange Commission for his alleged failure to supervise the hedge fund’s activities. Here are some facts about SAC Capital, which has been barred from investing client money as part of today’s settlement.
*Rise and fall of assets:
1992: Cohen starts SAC Capital with $25 million
2007: Assets peak at $16.5 billion
Jan. 2013: Assets at $15 billion
Aug. 2013: SAC executives say they expect the firm to have $9 billion at start of 2014
SAC, which started with nine employees, employed 950 people globally as of Sept. 20, according to a regulatory filing, about 50 fewer than it did in April. About 400 of those employees were investment professionals.
SAC last month told employees that it’s closing its London office, with more than 50 employees. The firm at that time said it didn’t expect any further material changes in investment headcount.
At least 11 former or current SAC employees have been linked to insider trading while at the firm, most of them working on technology and health-care stocks.
SAC’s average annual returns since inception: 25 percent.
SAC’s Highest Annual Return: 73 percent in 2000
SAC’s First Annual Loss: 19 percent in 2008
SAC’s Year-to-Date Returns through Oct. 31: 16 percent
*How Rivals Fared:
Millennium Management LLC, the $19 billion hedge fund firm run by Israel Englander, posts an average annual return of 14 percent since its 1990 inception.
Brevan Howard Asset Management, the $40 billion hedge fund co-founded at Alan Howard, has produced an 11.7 percent return since its 2003 inception
Tudor Investment Corp., the $13.2 billion firm run by Paul Tudor Jones, has returned an average annual of 19.4 percent since 1986.
1987: Ivan Boesky, who pleaded guilty to conspiracy in 1987 in an insider case, paid $100 million and was sentenced to three years in prison.
1991: Michael Milken, the former junk bond financier who pleaded guilty to securities fraud, paid more than $1.1 billion in criminal and civil fines as part of his March 1991 settlement with the Justice Department and SEC.
2011: Raj Rajaratnam, the Galleon Group LLC co-founder whose 11-year prison sentence is one of the longest in U.S. history for insider trading, was ordered to pay $156 million in civil and criminal fines and penalties stemming from his conviction in 2011.
2013: Rajat Gupta, the former Goldman Sachs Group Inc. director found guilty of passing confidential tips to Rajaratnam, was ordered to pay $13.9 million in a related U.S. regulatory case.
Nov. 2013: SAC to pay $1.8 billion, a record for insider trading. To date, the Manhattan U.S. Attorney’s office has filed insider trading charges against at least 87 people, and won convictions against 75 since August 2009.
To contact the editor responsible for this story: Christian Baumgaertel at email@example.com