A federal judge refused to dismiss lawsuits by former Elan Corporation, plc (ADR) (NYSE:ELN) and Wyeth shareholders who claimed they lost money as Steven Cohen’s SAC Capital Advisors LP conducted insider trading in the drug makers’ stocks.

SAC Captail Advisors

The judge also rejected dismissal requests by defendants Mathew Martoma, a former SAC portfolio manager who was found guilty of insider trading.

SAC’s agreement to settle

As reported earlier, SAC Capital agreed in June to settle the insider trading allegations filed by the U.S. Securities and Exchange Commission against its unit, CR Intrinsic, for $600 million. The SEC alleged that CR trader Martoma made trades involving shares of Wyeth Limited and Elan Corporation, plc (ADR) (NYSE:ELN) based on information he received from Dr. Sidney Gilman, who was responsible for releasing the official results of a clinical trial to the public.

As part of the deal, Steve Cohen’s SAC also agreed to cease managing outside capital and is now a family office known as Point 72 Asset Management. As part of a related restructuring, the firm will close CR Intrinsic.

Investors permitted to pursue suit

In the latest decision, U.S. District Judge Victor Marrero in Manhattan allowed the entire case against Steve Cohen and SAC to go forward, apart from claims that investors agreed should be dismissed as they were brought too late. The judge also rejected dismissal requests by defendants Mathew Martoma and Sidney Gilman, a University of Michigan medical professor.

Marrero said it was too soon to dismiss damages claims over a plunge in Elan Corporation, plc (ADR) (NYSE:ELN)’s stock price–two days after the Alzheimer’s drug trial results were released–over problems with its multiple sclerosis drug Tysabri. He said even if SAC didn’t know about the problems, it was unclear whether investors had sufficient time after the results were released to avoid more losses by selling shares.

In May, Michael Steinberg, a former portfolio manager at SAC Capital Advisors, was sentenced in federal court to 3 1/2 years in prison for insider trading. He makes the eighth current or former SAC capital employee convicted of insider trading. Steinberg was accused of trading on illegal tips about Dell Inc. and NVIDIA Corporation (NASDAQ:NVDA) reportedly given to him by a former SAC analyst.