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'Fair Fund’ Plan Prompts Legal Debate, Hedge Fund Alert

Wednesday, January 14, 2015

Industry lawyers are keeping a close eye on an unusual initiative by the SEC to distribute the proceeds of an insider-trading settlement with SAC Capital to investors who lost money on two stocks the firm traded in 2008.

The SEC is awaiting court approval to use $602 million SAC paid for illegally trading shares of drugmakers Elan and Wyeth to establish a “fair fund” under provisions of the Sarbanes-Oxley Act. The law provides a mechanism for regulators to compensatev ictims of investment fraud — something the SEC has rarely tried in an insider-trading case. 

Partner David Miller is quoted regarding the matter.

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