A federal grand jury has indicted SAC Capital Advisors L.P. and three affiliates on four counts of securities fraud and one count of wire fraud, with prosecutors implicating the Stamford fund in an an alleged pattern of insider trading schemes occurring from 1999 to 2010.
Also included in the indictment, which was announced by the U.S. Justice Department this morning, were SAC Capital Advisors L.L.C., CR Intrinsic Investors L.L.C. and Sigma Capital Management L.L.C.
The 41-page indictment states, “Unlawful conduct by individual employees and an institutional indifference to that unlawful conduct resulted in insider trading that was substantial, pervasive and on a scale without known precedent in the hedge fund industry.”
The indictment comes just days after the Securities and Exchange Commission filed civil action against SAC founder Steven A. Cohen, in which the agency claims the Greenwich billionaire failed to supervise two of his senior employees who are facing criminal insider trading charges. (The two, Mathew Martoma and Michael Steinberg, have each pleaded not guilty and are scheduled to be tried in November.)
The hedge fund has suffered since whispers began circulating in late 2012 that federal prosecutors were seeking to levy charges against SAC Capital. Investors have reportedly already pulled about $5 billion of the roughly $6 billion in outside funds managed by the firm. The bulk of the firm’s remaining assets under management belong to Cohen, with some belonging to SAC employees. An estimated 1,000 people are employed by SAC Capital.
Earlier this spring, SAC Advisors paid about $616 million to settle two civil insider trading cases brought by the SEC.
SAC Capital could not immediately be reached for comment.
