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US Hedge Fund Pleads Guilty in Criminal Case

U.S. Attorney Preet Bharara speaks at a press conference concerning a case in which 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, in New York, Nov. 4,
One of Wall Street's most successful hedge funds, SAC Capital Advisors, has pleaded guilty to fraud charges.

The plea is part of a $1.8-billion deal to resolve allegations the investment firm encouraged rampant insider trading for many years.

A lawyer for the company entered guilty pleas Friday in a Manhattan court to four counts of securities fraud and one count of wire fraud. The judge did not immediately accept the plea, saying she must review the terms of the deal.

At least one objection to the deal was read in court, which noted that no one will go to jail under the agreement.

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.

Prosecutors say they think the $1.8-billion penalty is the largest ever charged for insider trading offenses.

A hedge fund typically invests large amounts of money in high-risk investments to generate large returns. They generally are lightly regulated.