3 SAC Executives Receive Subpoenas

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Three top executives at fund manager SAC Capital have been subpoenaed as part of regulator’s insider trading case against the company, according to a piece on the Wall Street Journal. The head of the firm, Stephen A. Cohen, has also been subpoenaed in the case, which involves insider trading in Wyeth and Elan Corporation shares.

3 SAC Executives Receive Subpoenas

According to people familiar with the matter talking to the WSJ reporters, subpoenas were sent to Thomas Conheeney, the President at SAC Capital, Phillipp Villhauer, the company’s head of trading, and Steven Kessler, the head of compliance at SAC. All three are at the top of the fund manager, and all three have a great deal of access to Mr. Cohen himself.

The SAC insider trading case centers around centers around trades the company made ahead of the release of pharmaceutical trial for a drug developed by Wyeth and Elan Corporation. When the results came out, showing negative results for the Alzheimer drug, the firm’s stock fell, and SAC avoided losses and made gains netting $250 million. Late in 2012 one of the firm’s traders, Matthew Martoma, was the first to be arrested in the case against the company.

The case is the single biggest capital insider trading investigation in history, and the SEC and other regulators are doing their best to get all of the facts. Their subpoenas of three more executives at the firm are not unusual in that respect, and there could be many more subpoenas coming the firm’s way in the future.

According to the Wall Street Journal report, neither spokespeople from law enforcements and regulators or from the fund manager itself were willing to comment on the new subpoenas. In recent days, SAC has said that it is no longer cooperating unconditionally with the government in the case, indicating that the heat might ramp up.

Last March, SAC agreed to pay a record $616 million settlement on the insider trading case. That deal has not been rubber stamped yet, and it may be in jeopardy in this new wave of legal warfare between the firm and government regulators. The insider trading case, may in truth, be just about to ramp up significantly.

Last March one of the portfolio managers at SAC Capital, Michael Steinberg was arrested by the FBI during inquiries into the case. Steinberg was released from custody after putting up a $3 million bond.

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