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SAC Capital Pleads Guilty to Decade-Long Insider Trading Conspiracy

Tickers in this article: GS

Updated from 12:01 p.m ET to include SAC Capital, Preet Bharara comments and additional analysis throughout.

NEW YORK
( TheStreet) -- Steven A. Cohen's hedge fund SAC Capital Advisors  agreed to plead guilty to federal charges that it violated insider trading laws and will pay a record $1.8 billion in fines and restitution.

In July, a grand jury indicted SAC Capital and its affiliates for one count of wire fraud and four counts of securities fraud, in an insider trading conspiracy U.S. prosecutors alleged lasted over a decade and led to hundreds of millions of dollars in illegal profits and avoided losses.

The hedge fund's alleged insider trading occurred between 1999 and at least 2010, according to the complaint, which was filed on July 25 by Preet Bharara, U.S. Attorney for the Southern District of New York. The U.S. attorney also levied civil money laundering charges against the fund in July.

"Greed sometimes is not good," Bharara said at a Monday press conference, referencing  Wall Street , the 1987 classic that addressed a rash of insider trading in the first years of the leveraged buyout boom. When charging SAC Capital in July, Bharara said the hedge fund had become "a veritable magnet for market cheaters."

SAC Capital will plead guilty to every charge brought against the firm and its affiliates in July, however, individuals at the company will not receive immunity from future prosecutions, according to a letter unsealed in a U.S. District Court in New York.

In aggregate, the firm will pay a total of $1.8 billion when counting forfeitures and fines. That total amount will credit SAC Capital for a $616 million settlement it agreed with the Securities and Exchange Commission

"I don't think this was much of a deal. They just pled guilty," Thomas Rohback, a partner at law firm Axinn, Veltrop & Harkrider said in a Monday telephone interview.

The plea agreement, which is pending approval from a New York court, will require SAC Capital to terminate its investment advisory businesses, effectively closing the hedge fund to outside investors.

SAC Capital's billionaire head Steven A. Cohen has not been criminally charged.

"We take responsibility for the handful of men who pleaded guilty and whose conduct gave rise to SAC's liability," SAC Capital said in a statement. The fund, however, continued to maintain that illegal activity was limited to a handful of individuals.

"The tiny fraction of wrongdoers does not represent the 3,000 honest men and women who have worked at the firm during the past 21 years," SAC said. 

"Even one person crossing the line into illegal behavior is too many and we greatly regret this conduct occurred."

The fund's ongoing operations, a family office that manages Steven Cohen's wealth, will be required to employ compliance procedures to prevent insider trading.