The Norman Transcript

Nation/World

March 16, 2013

Fund pays $600M, settles insider trading charges

NORMAN — Hedge fund CR Intrinsic Investors will pay more than $600 million in what federal regulators are calling the largest insider trading settlement ever.

The Securities and Exchange Commission charged the firm with insider trading in 2012, alleging that one of its portfolio managers illegally obtained confidential details about an Alzheimer’s drug trial from a doctor before the final results went public and made trades from that information.

The SEC said Friday that the fund agreed to settle the charges and the parties neither admit nor deny the charges.

“The historic monetary sanctions against CR Intrinsic and its affiliates are a sharp warning that the SEC will hold hedge fund advisory firms and their funds accountable when employees break the law to benefit the firm,” George S. Canellos, acting director of the SEC’s Division of Enforcement, said in a statement.

The SEC said in its complaint that Sidney Gillman, a doctor who moonlighted as a medical consultant, tipped CR Intrinsic portfolio manager Mathew Martoma with safety data and eventually negative results in the trial of the drug made by drug firms Elan Corp. and Wyeth two weeks before they were made public in 2008. Martoma and CR Intrinsic then caused several hedge funds to sell more than $960 million in Elan and Wyeth securities in a little more than a week.

The commission amended its complaint Friday to add S.A.C. Capital Advisors and four hedge funds managed by CR Intrinsic and S.A.C. Capital as defendants, saying they each received ill-gotten gains from the scheme.

The settlement is subject to the approval of a U.S. District Court judge. It does not settle charges against Martoma, whose case is still in litigation

It was one of multiple settlements reached Friday by the SEC. The SEC also settled charges against Sigma Capital Management for $14 million. Sigma allegedly profited illegally from early information about the earnings of two technology companies.

Text Only | Photo Reprints
Nation/World
  • At mudslide scene, Obama mourns with survivors

    OSO, Wash. — Swooping over a landscape of unspeakable sadness and death, President Barack Obama took an aerial tour Tuesday of the place where more than three dozen people perished in a mudslide last month. He pledged a nation’s solidarity ...

    April 23, 2014

  • GM, lawyers fight over protections

    DETROIT — General Motors Co. and a battalion of trial lawyers are preparing for an epic court fight over whether GM is liable for the sins of its corporate past. The company is asking a U.S. bankruptcy court to shield it from legal claims ...

    April 23, 2014

  • Boston Marathon One year after tragedy, 32,000 run Boston Marathon

    BOSTON — Some ran to honor the dead and wounded. Others were out to prove something to the world about their sport, the city or their country. And some wanted to prove something to themselves....

    April 22, 2014 1 Photo

  • Festivities, tight security before race

    BOSTON — In many ways, it felt like any other pre-marathon Sunday in Boston....

    April 21, 2014

  • Boston race makes room for those affected by bombs

    BOSTON — “I need to run.” The messages started arriving just hours after the bombings, pleading for an entry into the 2014 Boston Marathon. For months the calls and emails continued, runners begging for an opportunity to cross the finish ...

    April 21, 2014

  • Documents detail another delayed GM recall for failed power steering

    DETROIT — General Motors waited years to recall nearly 335,000 Saturn Ions for power steering failures despite getting thousands of consumer complaints and more than 30,000 warranty repair claims, according to government documents released ...

    April 20, 2014

  • Landslide devouring part of Wyoming town

    JACKSON, Wyo. — A slow-motion disaster continued unfolding in the Wyoming resort town of Jackson on Saturday, as a creeping landslide that split a hillside home threatened to swallow up more houses and businesses. The ground beneath the ...

    April 20, 2014

  • Questions about missing Malaysian plane answered

    Travelers at Asian airports have asked questions about the March 8 disappearance of Malaysia Airlines Flight 370 while en route from Kuala Lumpur to Beijing. Here are some of them, followed by answers. Samuel Rogers is a 20-year-old ...

    April 20, 2014

  • NASA’s space station Robonaut finally getting legs

    CAPE CANAVERAL, Fla. — Robonaut, the first out-of-this-world humanoid, is finally getting its space legs....

    April 20, 2014

  • Hostage French journalists in Syria freed

    PARIS — Four French journalists held hostage in Syria for 10 months have been released, officials said Saturday, the latest batch of reporters to be freed in what has become the world’s deadliest conflict for the media....

    April 20, 2014