Posted Jul 25, 2013 by Martin Armstrong
In a 41-page indictment that includes four counts of securities fraud and one count of wire fraud, prosecutors in NYC have charged Steven Cohen’s SAC Capital of Singapore and its units with permitting a “systematic” insider trading scheme to unfold between 1999 and 2010. The government claims that the insider trading generated hundreds of millions of dollars in profits for the firm. The case attributes criminal acts of several employees to the company itself by alleging that the fund “enabled and promoted” the illicit behavior.
Preet Bharara, the US Attorney for New York City, said “When so many people from a single hedge fund have engaged in insider trading, it is not a coincidence.”
The interesting aspect is that insider trading has been extremely common among the institutions in NYC. The SAC prosecution was brought clearly because it is a Singapore firm yet this could lead to a lot more than the US Attorney Office has in mind. It is curious that they would criminally charge the fund in general for if you follow the bread crumbs you will end up square on Wall Street. This is one prosecution that should be watched carefully.