Sac Capital’s more than $600 million dollar agreement with the Securities and Exchange Commission (SEC) to settle the insider trading allegations of the agency may not obtain the  approval of Manhattan Federal Judge, Victor Marrero.

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According to a report from the New York Post, Judge Marrero is questioning the controversial language in the settlement agreement, which allows SAC Capital to “neither admit nor deny” any wrong doing in the alleged insider trading.

During a court hearing yesterday, Judge Marrero expressed concerns regarding the practice of securities regulator for using the language “neither admit nor deny” in its settlements. According to him, “The ground is shaking, let’s admit that. There are some tremors.

The presiding judge also raised concerns over the settlement because of the fact that the  answers to questions regarding the wrongdoing or  degree of involvement of SAC Capital in the insider trading allegations might be revealed soon during the upcoming trial of the hedge fund’s former portfolio manager Mathew Martoma.

During the argument of Charles Riely, legal counsel of SEC, Judge Marrero asked, “What happens if in the criminal courtroom across the hall Mr. Martoma is convicted? What does it make of your settlement?”

In addition, Marrero also challenged that size of the deal and pointed out the seriousness of the complaint and financial penalty. He said, “It seems counter-intuitive and incongruous to settle a case for $600 million that might cost $1 million to litigate. How believable is it to the public the claim that they did nothing wrong?”

Sac Capital agreed to settle the insider trading allegations filed by the SEC against its unit, CR Intrinsic value for $600 million. The agency alleged that Martoma arranged that trades for the shares of Wyeth Limited (NSE:WYETH) (BOM:500095) and Elan Corporation, plc (ADR) (NYSE:ELN) based on the information he received from Dr. Sidney Gilman who was responsible in releasing the official results of a clinical trial to the public. The SEC estimated that the hedge fund gained $276 million from the trades.

Martin Klotz, the lawyer representing Sac Capital said that the hedge agreed to settle the allegations because they have a business to run. He said, “We are willing to pay $600 million because we have a business to run. We want to put this behind us.”

The New York Post indicated that if Judge Marrero decides to approve the settlement, he could make it conditional based on the result of the pending case related to the $285 million settlement with Citigroup Inc. (NYSE:C) in the appeals court. Judge Jed Rakoff rejected the Citigroup settlement and criticized SEC for allowing the bank to evade the issue of culpability and settle the case.