Steve Cohen’s SAC Capital has reached an agreement to settle the case opened against the company involving insider trading. The deal includes a payment of $1.8 billion, the largest sum ever set for an insider trading settlement. SAC Capital will also be forced to plead guilty to every count of wrongdoing in the indictment paperwork. Aside from this, SAC Capital has also agreed to terminate its investment advisory arm.

1 P.M. Press Conference Reveals Details

According to CNBC reporter Kate Kelly, who cited sources “familiar with the matter,” Cohen’s SAC Capital finally reached a deal in the 5 year long investigation into its activities. Prior to July of this year, when U.S. prosecutors formally charged SAC Capital in the investigation, the hedge fund managed as much as $14 billion. However, investors began withdrawing their money shortly after the charges were files.

Prosecutors claimed that employees of SAC Capital regularly gained inside information regarding publicly traded companies. This information influenced billions of dollars in trades, and sparked the investigation that led to today’s deal.

Prosecutors announced that the two sides had come to an agreement on how to settle the case. This agreement, if approved by the judge will resolve two cases at once. The criminal case in which charges have been filed against the company will be settled, as well as the civil forfeiture action against SAC and its employees. Preet Bharara, the U.S. Attorney who is prosecuting the case, stood next to the FBI’s head of the New York criminal division, April Brooks, for a press conference this afternoon at 1 p.m.

The U.S. Attorney had this to say at the press conference:

Today, SAC Capital, one of the world’s largest and most powerful hedge funds, agreed to plead guilty, shut down its outside investment business, and pay the largest fine in history for insider trading offenses. That is the just and appropriate price for the pervasive and unprecedented institutional misconduct that occurred here.”

He went on to say that the victims included not only those who were hurt by the insider trading, but also “everyone” who believed the markets should be operated fairly.

April Brooks, the lead FBI agent on the case, said, “As today’s plea illustrates, SAC institutionalized their practices by cultivating a culture of corporate corruption. The problem of insider trading is real and for companies that willfully turn a blind eye — be on notice — how your employees make money is just as important as how much they make.”

Other Activities

SAC Capital will be settling the case, but there are other pending issues to be cleared up. There are separate civil charges that have been leveled at the company by the Securities and Exchange Commission during the summer. These allegations include that Steve Cohen didn’t properly supervise his employees, which is what led to insider trading.

However, SAC will relinquish its right to manage public funds as part of the settlement. It will be forced to surrender its registration as an investment advisor to the SEC.
According to reports, staff layoffs are expected in addition to those that have already taken place in the company’s U.S. and London offices.