SAC Capital pleaded not guilty to insider-trading charges on Friday, a day after the U.S. accused the $15 billion hedge fund of instigating insider trading on an unprecedented scale.
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The criminal charges against the successful hedge fund cast doubt about its ability to survive as no major financial firm has survived a criminal indictment.
The next court date for SAC is September 24.
The U.S. accused SAC Capital of motivating employees to seek out non-public information that would give the firm an “edge” against other investors, causing hundreds of millions of dollars in illegal profits.
According to the 41-page indictment, SAC made a habit of recruiting and hiring portfolio managers and research analysts who could contribute to the hedge fund’s practice of insider trading.
“SAC became over time a veritable magnet for market cheaters,” Preet Bharara, the U.S. attorney for the Southern District of New York, said during a press conference on Thursday.
Last week, the Securities and Exchange Commission charged Steven Cohen, SAC’s founder, with failing to supervise portfolio managers and prevent insider trading.