SAC Capital pleads guilty to fraud in $1.2bn settlement deal

Embattled SAC founder Steve Cohen. Photograph: Scott Eells/Getty Images

Steve Cohen's SAC Capital Advisors hedge fund pleaded guilty to fraud charges Friday as part of a $1.2bn deal to resolve a long-running insider trading investigation.

At a court hearing in Manhattan, SAC general counsel Peter Nussbaum entered the guilty plea to four counts of securities and one count of wire fraud charges, a crucial step toward ratification of the fund's record insider trading accord.

US district judge Laura Taylor Swain said she would wait to decide whether to accept SAC's guilty plea until after a pre-sentencing report was filed.

Under the plea agreement SAC reached with prosecutors, the hedge fund has agreed to pay $900 million in penalties to resolve the criminal case unveiled against it in July.

A federal judge on Wednesday signed off on a separate $900m judgment in a civil forfeiture action filed at the same time against SAC.

Under the civil deal, the hedge fund will only have to pay $284m, after getting credit for $616 million in settlements in related insider trading cases by the Securities and Exchange Commission.

SAC has reserved its right to withdraw its plea if Swain does not impose the penalties negotiated with prosecutors.

Swain scheduled the sentencing hearing for March 14.