The class-action lawsuit had alleged loss of money to investors due to insider trading by Cohen’s hedge fund.
Steven A. Cohen, a billionaire who used to formerly run SAC Capital Advisors LP, a hedge fund has now decided to settle a lawsuit filed by investors from Elan Corp, a drug manufacturer, who had alleged that they lost money because one of Cohen’s portfolio manager dealt in insider trading.
On Wednesday, a preliminary class-action settlement was filed with the federal court in Manhattan. It requires approval from U.S. District Judge John Koeltl.
SAC is now known as Point72 Asset Management LP.
The settlement resolves claims that an estimated $275 million was illegally traded in Wyeth and Elan by Mathew Martoma, who used to work at SAC’s CR Intrinsic Investors unit. The suit had alleged that the insider trades were done based on tips from a Michigan-based doctor regarding a 2008 Alzheimer’s drug trial.
“We are pleased to have resolved this matter and close the books on this chapter of SAC-era litigation,” said Mark Herr, Point72’s spokesman, in a statement.
In 2013, SAC had pleaded guilty to fraud and had to pay $1.8 billion in criminal and civil settlements with U.S. Authorities. Last December, it settled with Wyeth shareholders for $10 million.
Martoma has appealed his February 2014 insider trading conviction and is serving a nine year term in prison.
Meanwhile Cohen, 60, who was not criminally charged, has accepted a two-year ban on managing money for outside investors. His acceptance will end an SEC civil probe into this role as a supervisor of this incident.
No fine was imposed on Cohen.
Point72 is based in Stamford, Connecticut.
Incidentally, as per the terms of the settlement, Cohen nor SAC admitted too this wrongdoings.
The case is Kaplan et al v SAC Capital Advisors LP et al, U.S. District Court, Southern District of New York, No. 12-09350.