July 25 - SAC Capital is charged with criminal fraud, which could bring the $15 billion hedge fund star to the brink of extinction and further tarnish its famed founder, investor Steve Cohen. Conway G. Gittens reports.
One of America's most successful investment firms SAC Capital -officially charged in separate criminal and civil cases of insider trading U.S. Attorney General for New York Preet Bharara: SOUNDBITE: PREET BHARARA, U.S ATTORNEY GENERAL, SOUTHERN NEW YORK DISTRICT (ENGLISH) SAYING: "SAC trafficked in insider information on a scale without any known precedent in the history of hedge funds. As described the indictment, the scope of insider trading was deep and it was wide. It spanned more than a decade in time, involved securities of at least 20 companies, extended across multiple sectors of the economy and benefitted SAC to the tune of at least 100s of millions of dollars." But that's not all - there are claims of wire tapping and money laundering at the roughly $15 billion hedge fund. And the government hopes to claw back an unspecified amount. To be clear, the fund's famed founder Steven Cohen is already facing civil charges, but no new criminal indictments were revealed at Thursday's press conference. Former SEC enforcement lawyer Jacob Frenkel: SOUNDBITE: JACOB FRENKEL, ATTORNEY, SHULMAN, ROGERS, GANDAL, PORDY AND ECKER (ENGLISH) SAYING: "I think we would have seen it if they had that case. The implication is that maybe they will sometime in the future but they are not there yet. I don't think it's critical. If one of the objectives here is to take SAC Capital out of the market, this is the shot gun blow to the stomach. It is pushing the back so far it may devastate the company even short of an actual conviction." And that has implications which will be far reaching on Wall Street, says Hilary Kramer of A&G Capital. SOUNDBITE: HILARY KRAMER, CHIEF INVESTMENT OFFICER, A&G CAPITAL (ENGLISH) SAYING: "Investment banks all over Wall Street have made money - they make money on commissions, trading with SAC. In fact, I have learned that up to five percent of the commissions of trading on the Big Board come from SAC." SAC says the actions of a few don't reflect the entire firm and it is working on a deal to operate as normal, which includes protecting legitimate interests of "all parties."