News / Economy

Federal Officials: Hedge Fund Will Pay Huge Fine for Insider Trading

U.S. Attorney Preet Bharara speaks at a press conference, Nov. 4, 2013, in New York. Federal prosecutors say hedge fund giant SAC Capital Advisors has agreed to plead guilty to fraud charges and to pay a $1.8 billion financial penalty.
U.S. Attorney Preet Bharara speaks at a press conference, Nov. 4, 2013, in New York. Federal prosecutors say hedge fund giant SAC Capital Advisors has agreed to plead guilty to fraud charges and to pay a $1.8 billion financial penalty.
VOA News
Federal prosecutors say one of Wall Street's most successful hedge funds, SAC Capital Advisors, has agreed to pay a total of $1.8 billion to settle charges it encouraged rampant insider trading for many years.

Federal prosecutors say SAC employees used information not available to the general public to illegally make major trades. Using such non-public information gave SAC an unfair advantage over rival investors.

SAC also agreed to stop managing money for outside investors, and establish strong rules and practices to prevent future insider trading.

At least five SAC employees have pleaded guilty to insider trading and two more face trial soon.

Prosecutors say they think the $1.8 billion penalty is the largest ever charged for insider trading offenses. The total fine includes more than $600 million already paid in connection with this case. The settlement must still be approved by a judge.

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