SAC Capital Advisors, the hedge-fund firm that Steven A. Cohen transformed into a family office following a record insider-trading settlement, lost a bid to dismiss an investor class action over the wrongdoing.
Bloomberg News reports SAC’s request to dismiss claims by investors in Elan Corp. and Wyeth LLC, now a unit of Pfizer, was denied by U.S. District Judge Victor Marrero in Manhattan. The judge did narrow the litigation by reducing the range of trade dates that apply to one of three claims in the case.
'SAC’s arguments are inappropriate at this stage in the proceedings,' Marrero said in his ruling, signed on Wednesday and made public Thursday. 'The allegations in this suit concern what has been called the most profitable insider trading scheme ever uncovered.'
The suits relate to trading in Elan and Wyeth shares by former SAC fund manager Mathew Martoma on tips about an Alzheimer’s drug, allowing the firm to gain $555 million in illegal profit and avoided losses, according to the ruling. The investors said they lost out by trading in the shares at the same time SAC was trading with non-public information.
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