For the first time in nearly thirty years, a Wall Street firm has admitted guilt for securities fraud. SAC Capital, the uber-successful hedge fund run by billionaire Steven A. Cohen, on Monday pled guilty to insider trading—and will cough up a record $1.2 billion penalty. As part of the deal, SAC will no longer manage money for investors outside the company, which essentially leaves it with just Cohen’s substantial fortune. The case against Cohen, a high-flying consumer of pricey art, was many years in the making and has many on Wall Street worried that the success will encourage authorities to go after other major corporations. It’s the first plea of its kind since the 1980s, when junk bond investor Michael Milken at Drexel Burham Lambert paid about $1 billion (adjusted for inflation) in fines.
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