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The Morning Brief: Government Offers $1.5-2bn Settlement Deal to SAC

Federal prosecutors told the folks at SAC Capital Advisors that they would settle with the Stamford, Connecticut hedge fund firm for $1.5 billion to $2 billion, according to the Wall Street Journal. SAC lawyers are reportedly pushing for a deal that is lower and takes in consideration the $616 the firm already agreed to pay to the Securities and Exchange Commission in a separate civil settlement. SAC — and not founder Steve Cohen — was criminally charged with engaging in insider trading.


Sandell Asset Management disclosed that its owns 5.1 percent of Bob Evans Farms and sent a letter to the company’s board of directors urging it to take several steps to unlock the value of its stock. The New York City hedge fund firm, which managed about $761 million at year-end, called on the company to separate its food products business from its restaurant business and to maximize the value of its real estate. It should then use the proceeds of the recommended transactions to buy back its stock, Sandell added. The firm, founded by Thomas Sandell in 1998, said that if the company implements its recommendations, the stock would be worth between $73 and $84. The stock closed Tuesday at $57.43, up about 0.70 percent on the day.


The trial of former SAC Capital Advisors portfolio manager Mathew Martoma on insider trading charges has been postponed to January 6 from November 4. U.S. District Judge Paul Gardephe said the delay was requested by Martoma’s lawyer, Richard Strassberg, who has another trial that starts this week.


Ken Griffin’s Citadel Advisors reported it owns 6 percent of the shares of Repros Therapeutics, a development-stage biopharmaceutical company. It was filed as a passive stake. Separately, Citadel also reported a 5.2 percent passive position in BJ’s Restaurants.


Shares of J.C. Penney fell another 3.80 percent, to close at $11.90. This is the embattled retailer’s lowest price since January 2001. Maybe Pershing Square Capital Management’s William Ackman should have shorted Penney and gone long Herbalife.


Tiger Global’s various entities sold another one million shares of Tal Education Group, reducing its stake to 11.3 million shares, or 16.5 percent of the total outstanding. The New York City firm, which is the company’s largest shareholder, sold the latest block of shares for between $13 and $13.28 per share. The stock, which closed Tuesday at $14.02, has roughly doubled in a little more than a year. According to one report, Oppenheimer raised its price target on the stock to $17 from $14.


John R. Torell IV, the managing director and chief financial officer of Tudor Investment Corp., was elected chair of the Managed Funds Association. Torell, who also serves as a managing director, joined Tudor in May 1994. He previously worked at CS First Boston Corporation, Merrill Lynch and Chemical Bank.

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