SAC Capital’s two-prong, $1.8 billion plea agreement with Uncle Sam may be a “sweetheart deal” to some, but a federal judge Wednesday approved the civil money-laundering slice of the deal.
In a 45-minute conference with a gaggle of lawyers for Steve Cohen’s SAC and prosecutors, Judge Richard J. Sullivan said he would approve the $900 million civil settlement of July’s lawsuit brought by Manhattan US Attorney Preet Bharara.
Sullivan, as he was about to announce his decision, noted that he had received an email Tuesday from someone lambasting the agreement as a “sweetheart deal” for Cohen’s hedge fund that would create a “loss of trust in our system.”
The judge, while acknowledging the SAC matter is a “high-profile case people will be watching,” politely asked that others not email him. He then said he had little authority to tinker with the financial terms of the deal.
“Whether I think $900 million is a sufficient number is irrelevant,” he said.
Sullivan said the deal “doesn’t require additional scrutiny” because it’s a civil matter.
A hearing on the second prong of the record-setting settlement — the criminal charges — is scheduled for Friday. That case, the judge said, will apply a “different standard.”
The government’s civil suit initially sought “any and all” assets of SAC Capital because “hundreds of millions of dollars of illegal profits” had been commingled with other assets in a money-laundering scheme that it claimed could bring additional penalties.
The government settled for a fraction of SAC’s $9 billion.
As a result of today’s decision, SAC will be wiring $284 million to the Department of Justice — the settlement amount minus the $616 million credit for the money it has already agreed to pay under and earlier Securities and Exchange Commission action.
Third parties who believe they’ve been harmed by SAC’s actions — such as shareholders of companies whose shares were traded by SAC based on insider-information — can petition the DOJ for compensation after the deal is approved.