SAC Capital Advisors LP

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SAC Capital Advisors LP
SAC LP logo.png
Headquarters Stamford, CT
Employees 800
Products Group of hedge funds

SAC Capital Advisors, L.P. is a private investment management firm headquartered in Stamford, CT. As of 2011, the hedge fund's worth has grown from an original $25 million investment to $13 billion.[1]

History

SAC is the successor to another firm founded by Steven A. Cohen in 1992. SAC is a diversified, research-driven investment management firm built around a premier position in long/short equity, as well as significant positions in quantitative and other strategies.[2]

As of 2009, the firm's flagship onshore fund, SAC Capital Management, had only one down year since it was launched. It lost 27.56 percent in 2008 when the average hedge fund lost 19 percent.

In November of 2010, the offices of Level Global Investors LP and Diamondback Capital Management LLC, firms founded by alumni of SAC Capital Advisors LLC, were searched by Federal Bureau of Investigation agents. FBI raids seeking documents from the three investment firms were said to be related to hedge fund insider trading investigations directed by the office of Manhattan U.S. Attorney Preet Bharara.[3]

In June of 2011, SAC Capital Advisors became the target of a probe by the U.S. Senate, which ultimately turned attention to the SEC's handling of investigations and used the hedge fund as a model.[4][5]

On November 20, 2012, Mathew Martoma, a former hedge fund portfolio manager with the CR Intrinsic Investors unit of SAC, was accused of perpetrating "the most lucrative insider trading scheme ever," according to Preet Bharara, the United States attorney in Manhattan, who brought the charges in Federal District Court in Manhattan. [6]

In October of 2013, SAC Capital Advisors entered an agreement in principle with federal prosecutors to pay a penalty of more than $1 billion in a potential criminal settlement. The penalty would be the largest ever for an insider-trading case, according to sources quoted in the Wall Street Journal.[7] The firm had already agreed to pay a $616 million penalty in a civil settlement with the Securities and Exchange Commission, in which it neither admitted nor denied wrongdoing.

On November 4, 2013, SAC agreed to plead guilty to all five counts of insider trading violations, becoming the first large Wall Street firm in a generation to confess to criminal conduct.[8] As part of the plea agreement, SAC was forced to stop managing outside money. On March 11, 2014, SAC capital that it would change its company name to Point72 Asset Management as it shifted its focus to managing his own assets rather than serving as a hedge fund for wealthy investors. [9] A federal judge accepted SAC's criminal settlement on April 10, 2014, finalizing the decade-long investigation. After years of denials, the hedge fund agreed to pay a $1.8 billion penalty.[10]

Products and Services

SAC is composed of several divisions, each deploying multiple strategies across a variety of industry sectors and asset classes.

References

  1. FACTBOX: Fun facts about Steve Cohen and SAC Capital. Reuters.
  2. Introduction to SAC. SAC Capital Advisors.
  3. FBI Searches Offices of Level Global, Diamondback Funds. Bloomberg.
  4. The SEC, Not SAC Capital, Is Target of Senate Probe. Reuters.
  5. Grassley Grants More Time for S.E.C. Response. New York Times.
  6. Insider Inquiry Inching Closer to a Billionaire. New York Times.
  7. Prosecutors and SAC Head Toward a Possible Record-Breaking Settlement. The Wall Street Journal.
  8. After a Decade, SAC Capital Blinks. The New York Times.
  9. Steven A. Cohen's SAC picks new name: Point72. Reuters.
  10. Judge Accepts Settlement in SAC Insider Case. The Wall Street Journal.