SAC Capital Indicted on Fraud Charges
The federal government announced fraud charges against SAC Capital, one of Wall Street's largest hedge funds, Thursday.
The company, owned by billionaire Steven Cohen, is facing four counts of securities fraud and one count of wire fraud for a scam that lasted from 1999 to 2010. No charges were brought against Cohen himself.
The 41 page indictment follows a seven year investigation of the hedge fund, and claims that SAC Capital's insider trading "was substantial, pervasive and on a scale without known precedent in the hedge fund industry." The insider trading allegedly "enabled the hedge fund to generate hundreds of millions of dollars of illegal profits and avoided losses," Reuters reports.
Charges like these against large companies are rare, because of the "wider effects they can have on the economy and on innocent employees." Cohen was charged last week with failing to supervise two employees charged with insider trading. Those employees will go on trial in November.