SAC Capital agrees to $1.8 billion fine to settle insider trading case

A major Wall Street hedge fund has agreed to pay the largest fine for insider trading in U.S. history, as well as plead guilty to several civil and criminal charges.

SAC Capital Advisers will pay $1.8 billion in the deal struck with the Justice Department. The firm also agreed to stop providing services to outside clients but will likely continue to manage the funds of its billionaire founder, Steven Cohen.

The settlement, if approved by a judge, would draw to a close charges filed in July that accused SAC of employing widespread insider trading tactics to boost profits.

Preet Bharara, the U.S. Attorney for the Southern District of New York, called the record-breaking fine “steep but fair,” and in line with the “breadth and duration” of the insider trading.

A separate $616 million penalty SAC paid earlier to the Securities and Exchange Commission as part of another settlement would count toward the new penalty, Bharara wrote.

If the settlement is approved, SAC would also be subject to a five-year probationary period. The agreement provides no immunity to individual employees or executives and does not address a separate SEC case against Cohen. The SEC charged in July that Cohen failed to supervise his managers to prevent insider trading.