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The Morning Brief: Judge Approves $1.8 Billion SAC Settlement

A Federal judge has approved the government’s $1.8 billion settlement with Steve Cohen’s former hedge fund firm, SAC Capital Advisors, stemming from its role in the government’s insider trading investigation. Under the deal, SAC, which this week changed its name to Point72 Asset Management, agreed to pay $900 million to settle the Justice Department’s criminal case as well as another $900 million to end the lawsuit. The judgment includes the $616 million SAC earlier agreed to pay the Securities and Exchange Commission to settle civil charges related to the matter. The money not being paid to the SEC will be divided between a criminal fine that goes to the U.S. Treasury and the Justice Department’s Asset Forfeiture Program. “Today marks the day of reckoning for a fund that was riddled with criminal conduct,” said U.S. Attorney Preet Bharara in a statement. “SAC fostered pervasive insider trading and failed, as a company, to question or prevent it.” It noted that his office has successfully convicted eight SAC employees of insider trading. “When so much criminal conduct takes place within one institution, it is appropriate to impose criminal liability on the institution itself,” Bharara added. “Today’s sentence affirms that when institutions flout the law in such a colossal way, they will pay a heavy price.”

It’s official: Carl Icahn has lost his bid to split eBay into two companies. At least for now. On Thursday morning, eBay announced that Icahn agreed to end his proxy contest before the upcoming annual meeting and withdraw his proposal to separate the company’s PayPal business and his attempt to elect two nominees to the board of directors. The company said it agreed with Icahn’s suggestion to appoint David Dorman, a founding partner of Centerview Capital Technology, to the board, thus expanding the number of independent directors to 10 on the 12-member board. “I don’t think we capitulated,” Icahn said in an interview on CNBC. Showing a more conciliatory tone, the activist investor — mindful of his new confidentiality agreement — praised the company and even CEO John Donahue, asserting that eBay has potential and is undervalued. “In the end, if you want to enhance value, it should be separated,” he said. “Therefore, I think John will eventually want to do that.” Icahn also confirmed earlier reports he got into the stock in the low $50s. The stock closed Thursday at $54.08, down 3.24 percent on a very bad day for Internet stocks in general.

Jeffrey Smith’s Starboard Value raised its stake in Unwired Planet to 9.8 percent from 8.34 percent at year-end. The company, which holds mobile Internet patents, is one of Starboard’s smaller targets, with a market capitalization of about $221 million. However, it has attracted a blue-chip roster of major shareholders, including Soros Fund Management and Kingdon Capital Management.

Kamel Maamria, the head of the global investment portfolio at Qatar Holding, a branch of the Qatar Investment Authority, is leaving to start a hedge fund, according to DealBook. The fund will focus on the Middle East and have offices in Qatar and Dubai. Maamria was previously a partner at the Boston Consulting Group, according to the report.

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