SAC Sued by Elan Investors Over Alleged Insider TradesBob Van Voris
SAC Capital Advisors LP and its founder, Steven A. Cohen, were sued by a group of Elan Corp. investors who claimed losses as a result of alleged illegal insider trading by SAC in the drugmaker’s stock.
Six investors who held American depositary receipts in Dublin-based Elan sued in Manhattan federal court Dec. 21. They are seeking to represent a class of investors who bought Elan ADRs or traded in options from July 21 to July 29, 2008.
Prosecutors have charged Mathew Martoma, a former SAC portfolio manager, with using illegal tips to help the firm make profits or avoid losses totaling $276 million by trading in Elan and Wyeth LLC.
An indictment filed against Martoma Dec. 21 claims he used tips from a physician who was in charge of monitoring the safety of a drug undergoing clinical tests to advise an unnamed “hedge fund owner” to trade in Elan and Wyeth stock. A person familiar with the case said Steven A. Cohen, SAC’s founder, is the hedge fund owner referred to by prosecutors.
Jonathan Gasthalter, a spokesman for Stamford, Connecticut-based SAC, declined to comment on the lawsuit. He has said SAC and Cohen acted appropriately in connection with the Elan and Wyeth trades.
The investors are represented by the New York law firm Wohl & Fruchter LLP. In addition to SAC and Cohen, the complaint names as defendants two SAC units, Martoma and Sidney Gilman, the doctor who allegedly passed the drug-trial information.
The case is Kaplan v. SAC Capital, 12-CV-9350, U.S. District Court, Southern District of New York (Manhattan).