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SAC Capital to pay $10m to end lawsuit

SAC Capital Advisors LP — the now defunct hedge fund that set up a Bermuda reinsurer in 2012 — agreed to pay $10 million to end a lawsuit by Wyeth LLC shareholders who claimed they lost money because SAC engaged in insider trading.

A pension fund for employees of Birmingham, Alabama, that owned Wyeth shares sued SAC in federal court in New York in April 2013, accusing it of damaging shareholders by trading on tips about an Alzheimer's drug.

The settlement needs approval by US District Judge Victor Marrero.

Mr Cohen stopped managing outside money after SAC was shut down as part of a 2013 plea deal with the US government. The firm paid a $1.8 billion penalty and was changed into a family office called Point72 Asset Management. Mr Cohen was not charged with wrongdoing.

The SEC is proceeding with an administrative case in which Mr Cohen is accused of failing to supervise Mathew Martoma, the former SAC trader convicted of insider trading in Wyeth shares. A hearing in the proceeding is set for April in New York.

Martoma is serving a nine-year sentence for securities fraud.

SAC Re was formed in Bermuda in 2012 as one of a clutch of hedge fund-backed reinsurers on the Island. After the hedge fund landed in trouble, the reinsurer, which had no involvement in the insider trading scandal, was acquired by Hamilton Insurance Group in late 2013.

Steven Cohen: his SAC Capital hedge fund set up a short-lived Bermuda reinsurer in 2012

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Published December 29, 2015 at 8:00 am (Updated December 28, 2015 at 7:35 pm)

SAC Capital to pay $10m to end lawsuit

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