First, JPMorgan Chase agrees to accept fault for manipulating the market, and then SAC Capital Advisors makes financial history the wrong way—by accepting a record $1 billion fine and agreeing to admit to insider trading charges. This sequence of events might be noteworthy to Joseph Tacopina.
In July, the Federal Bureau of Investigation (FBI) announced insider trading charges against SAC Capital companies. The FBI charges include:
Joseph Tacopina highlighted that eight SAC operatives have been charged or convicted of insider trading. The SAC Hedge Fund rewarded employees for profits obtained through insider trading, deployed limited compliance measures, and recruited individuals to use their networks for insider trading.
Preet Bharara, United States attorney for the Southern District of New York, said the SAC Hedge Fund strategy “was substantial, pervasive and on a scale without known precedent in the history of hedge funds.”
Without the settlement, former employees charged by the FBI could testify against the hedge fund, creating additional liabilities and causing a more precipitous business decline than already experienced by hedge fund manager Steven Cohen. Settlement of these charges does not preclude further charges against Mr. Cohen personally for failing to supervise his employees or create a more rigorous atmosphere of compliance at his companies. Legal experts like Joseph Tacopina often emphasize the importance of robust compliance measures to avoid such situations.
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