SAC Capital Advisors Investigation
The SAC emails and IMs: Illegal inside information?
Dealbreaker's Matt Levine jokes about the euphemisms SAC traders appeared to use on email to describe their informational advantage in certain trades, an advantage that the U.S. Department of Justice's indictment argues is illegal inside information.
Here is a brief list of some of the emails and instant messages that have formed the basis of the DOJ's indictment:
- One job candidate was described as a "guy who knows the quarters cold, has a share house in the Hamptons with the CFO of a [Fortune 100 industrial sector company], tight with management."
- One SAC employee, describing a pharmaceutical company, wrote an email that said "I am very comfortable with that this qtr is going to be solid vs current consensus and guidance. I am getting coffee Tues afternoon with the guy who runs north American generics business."
- "My edge is contacts at the company and their distribution channel," one ex-SAC trader wrote. The trader said he had info "2nd hand read from someone at the company...who had been very good in the last two quarters."
- Ex-SAC trader Matthew Martoma, who faces insider trading charges, claimed to have a "better edge" about a drug approval process for one major pharmaceutical company.
- Other traders claimed Martoma had a "black edge," or inside information, on drug trial results.
- In 2009, an SAC trader alerting management to "recent research" that backed the trader's shorting of Nokia. From indictment: "The new PM apologized for being 'cryptic' but noted that the head of SAC compliance "was giving me Rules 101 yesterday - so I won't be saying much [.] [T]oo scary."
- Regarding Dell, another trader wrote "I have 2nd hand read from someone at the company - this is 3rd quarter I have gotten this read from them and it has been very good in the last two quarters...Please keep it to yourselves as obviously not well known."
- Another ex-SAC trader, Richard Lee, who on Thursday was charged with conspiracy to commit securities fraud, wrote that "between you and me...a friend of my cousin...who works in Dell finance" was "telling me to avoid the stock for Q2, because Q2 is gonna be horrible." Lee also referred to other contacts as "my guy," "my contact" or "my check" at various companies.
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