(MoneyWatch) SAC Capital, a hedge fund indicted on insider-trading charges in New York, has reached a tentative deal with federal prosecutors to settle the case and pay more than $1 billion in fines and forfeitures, a source familiar with the case confirmed to CBS News on Monday.
The tentative agreement provides for SAC fund to plead guilty and to pay forfeitures and the fine, according to the source, who spoke on the condition of anonymity to CBS News senior investigative producer Pat Milton.
The exact amount SAC would pay is not known, but prosecutors had been seeking a $1.8 billion penalty. The settlement was first reported Thursday by The Wall Street Journal.
The deal has not been finalized and talks are continuing, the source told CBS News.
SAC, run by billionaire investor Steven A. Cohen, was charged with insider trading in July in what was considered a rare criminal action against a large corporation. The company denied the charges at the time.
Federal prosecutors and the FBI, in announcing the indictment, called the fund “a magnet for market cheaters.”
Preet Bharara, the U.S. attorney for the Southern District of New York, said SAC’s insider-trading schemes were “substantial, pervasive and on a scale without known precedent in the history of hedge funds.”
Michael Steinberg and Mathew Martoma, two of Cohen’s former employees, are facing trial on criminal insider trading charges. Six former SAC employees have pleaded guilty to insider trading while at the fund.
Cohen himself was not criminally charged but he faces a separate lawsuit from the Securities and Exchange Commission, which accused him of failing to reasonably supervise employees who were accused of insider trading.
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