Hedge Fund Pleads Guilty, but Tycoon Gets Off

Firm hit with record fine after 'unprecedented' insider trading
By Kevin Spak,  Newser Staff
Posted Nov 5, 2013 11:15 AM CST
Hedge Fund Pleads Guilty, but Tycoon Gets Off
This Friday, July 26, 2013, file photo shows the Greenwich, Conn., estate belonging to billionaire hedge fund owner Stephen Cohen, founder of SAC Capital Advisors.   (AP Photo/Vincent T. Vuoto, File)

SAC Capital pleaded guilty to all five counts in the damning criminal complaint against it yesterday, agreeing to a total of $1.8 billion in penalties, the largest haul ever for an insider trading case. The plea marks the end of an 11-year case, and marks the first time "in a generation" that a Wall Street firm has confessed to criminal conduct, the New York Times reports. But prosecutors weren't able to lay a hand on the real apple of their eye, SAC founder Stephen A. Cohen.

Sources tell the Wall Street Journal that, barring new evidence, Cohen will never be charged personally with a crime, and though SAC will now be barred from managing money from outside investors, it will likely continue managing Cohen's massive fortune—and hence continue to be a market force. Traders speculate that Cohen, meanwhile, will simply found a new company to manage client money. Asked if they were disappointed, prosecutors defended the fines as "very substantial." SAC, meanwhile, released a statement decrying the "handful" of "wrongdoers" who had pleaded guilty. (Read more SAC Capital Advisors stories.)

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