EU says China guilty of giving illegal aid to solar industry

An employee dries newly made solar panels at a factory of a photovoltaic company in Jiaxing, Zhejiang province June 5, 2013.

Credit: Reuters/William Hong

By Robin Emmott

BRUSSELS | Tue Aug 27, 2013 5:30pm BST

BRUSSELS (Reuters) - The European Union has warned Beijing it has evidence Chinese solar companies benefit from illegal subsidies, people close to the issue said on Tuesday, but Brussels says it will not take action for now following a deal to defuse the row.

European companies accuse Chinese rivals of benefiting from unfair state aid allowing them to dump about 21 billion euros (18 billion pounds) worth of solar panels at below cost in Europe last year, putting European firms out of business.

The solar dispute, by far the biggest between China and the EU, threatened a wider trade war in goods from wine to steel until Brussels and Beijing agreed a minimum price for panels from China in late July and eased tensions.

But a nine-month investigation by the European Commission into China's solar industry has found Beijing broke World Trade Organisation rules by handing out cheap loans, land, interest-free credit lines and tax breaks to companies, people with knowledge of the situation told Reuters.

"There are clear indications that (Chinese) government policy influences the decision-making of the banks when deciding on the terms of financing to solar companies," said one person who declined to be named because the findings are not public.

A second person said Beijing, as well as Chinese and EU manufacturers, had been given the results of the investigation.

Under EU law, the Commission cannot impose more sanctions on Chinese solar exporters following the deal to set a price floor, but its investigation could influence EU free-trade advocates such as Germany and Britain that oppose limits on Chinese goods.

Wary of offending China's leaders and losing business in the world's second largest economy, Berlin and London have argued that concerns about Chinese solar dumping are secondary to the much larger EU-China trade relationship.

Europe is China's most important trading partner, while for the EU, China is second only to the United States.

Chinese solar panel production quadrupled between 2009 and 2011 to more than the world's entire demand as it took advantage of a growing market for green energy to tackle climate change.

Chinese companies deny receiving illegal subsidies, saying economies of scale allow them to sell at lower prices than their European rivals.

Beijing has also accused Europe of subsidising its solar industry. The European Union says aid to final users of solar energy is lawful to stimulate green energy, arguing China is wrong to directly help companies to produce solar products.

EU governments must decide in December whether to back the July price deal brokered by EU Trade Commissioner Karel De Gucht so it can run until 2015. It was seen as a compromise in dealing with China because a majority of EU governments were against prohibitive duties on Chinese solar panels.

The Commission's investigation could also have implications for Chinese telecoms companies that De Gucht, who has said China subsidises "nearly everything", has publicly accused of dumping products in Europe.

De Gucht, who handles trade issues for the European Union's 28 members, has threatened to launch an investigation that could lead to hefty duties on Chinese telecoms companies' equipment.

(Editing by Jeff Coelho)

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Former Grant Thornton partner pleads guilty to stealing $4 million

By Nate Raymond

NEW YORK | Wed Aug 21, 2013 1:46pm EDT

NEW YORK (Reuters) - A former partner at Grant Thornton pleaded guilty on Wednesday to stealing nearly $4 million in client payments to the global accounting firm.

Craig Haber, who prosecutors said diverted money to his own bank accounts between 2004 and 2012, pleaded guilty to a charge of mail fraud in federal court in New York.

"I knew my conduct was wrong," Haber said at a court hearing. "I apologize sincerely to the firm for my actions."

Haber, 59, had been a partner at Grant Thornton from 1993 to 2012 in the firm's New York offices.

As part of his plea, he has agreed to not appeal any order requiring up to $4.34 million in restitution. He also agreed to forfeit $3.97 million, as well as all rights to his downtown Manhattan apartment and $1.8 million in a brokerage account.

Haber was arrested in February in connection with the theft, in which Haber stole $3.97 million in payments intended for Grant Thornton, a court document said.

Grant Thornton is the sixth-largest accounting firm globally with $4.2 billion in revenues in 2012, according to International Accounting Bulletin.

The firm was not named in court documents, but a spokesman for Grant Thornton previously confirmed its role and said it cooperated with the investigation. Grant Thornton terminated Haber in July, charging documents said.

Tim Blair, a spokesman for the firm, said Wednesday the firm was "pleased that the authorities have resolved this matter swiftly."

At a hearing on Wednesday, Haber admitted to telling clients to mail checks directly to his office instead of through the normal processing channel. He then deposited the checks into a bank account he controlled, Haber said.

Charging documents said Haber then used the money for personal expenses, including his New York apartment's mortgage, according to charging documents.

Sentencing before U.S. District Judge Kevin Castel is set for December 13.

Haber faces a maximum 20 years in prison. Under a plea agreement detailed in court, prosecutors have stipulated to a sentencing guideline of 51 to 61 months in prison and a fine of $10,000 to $100,000.

The case is U.S. v. Haber, U.S. District Court, Southern District of New York, 13-cr-434.

(Additional reporting by Dena Aubin; editing by Andrew Hay)

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Former Grant Thornton partner pleads guilty to stealing $4 million

By Nate Raymond

NEW YORK | Wed Aug 21, 2013 1:46pm EDT

NEW YORK (Reuters) - A former partner at Grant Thornton pleaded guilty on Wednesday to stealing nearly $4 million in client payments to the global accounting firm.

Craig Haber, who prosecutors said diverted money to his own bank accounts between 2004 and 2012, pleaded guilty to a charge of mail fraud in federal court in New York.

"I knew my conduct was wrong," Haber said at a court hearing. "I apologize sincerely to the firm for my actions."

Haber, 59, had been a partner at Grant Thornton from 1993 to 2012 in the firm's New York offices.

As part of his plea, he has agreed to not appeal any order requiring up to $4.34 million in restitution. He also agreed to forfeit $3.97 million, as well as all rights to his downtown Manhattan apartment and $1.8 million in a brokerage account.

Haber was arrested in February in connection with the theft, in which Haber stole $3.97 million in payments intended for Grant Thornton, a court document said.

Grant Thornton is the sixth-largest accounting firm globally with $4.2 billion in revenues in 2012, according to International Accounting Bulletin.

The firm was not named in court documents, but a spokesman for Grant Thornton previously confirmed its role and said it cooperated with the investigation. Grant Thornton terminated Haber in July, charging documents said.

Tim Blair, a spokesman for the firm, said Wednesday the firm was "pleased that the authorities have resolved this matter swiftly."

At a hearing on Wednesday, Haber admitted to telling clients to mail checks directly to his office instead of through the normal processing channel. He then deposited the checks into a bank account he controlled, Haber said.

Charging documents said Haber then used the money for personal expenses, including his New York apartment's mortgage, according to charging documents.

Sentencing before U.S. District Judge Kevin Castel is set for December 13.

Haber faces a maximum 20 years in prison. Under a plea agreement detailed in court, prosecutors have stipulated to a sentencing guideline of 51 to 61 months in prison and a fine of $10,000 to $100,000.

The case is U.S. v. Haber, U.S. District Court, Southern District of New York, 13-cr-434.

(Additional reporting by Dena Aubin; editing by Andrew Hay)

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Former Grant Thornton partner pleads guilty to stealing $4 million

By Nate Raymond

NEW YORK | Wed Aug 21, 2013 1:46pm EDT

NEW YORK (Reuters) - A former partner at Grant Thornton pleaded guilty on Wednesday to stealing nearly $4 million in client payments to the global accounting firm.

Craig Haber, who prosecutors said diverted money to his own bank accounts between 2004 and 2012, pleaded guilty to a charge of mail fraud in federal court in New York.

"I knew my conduct was wrong," Haber said at a court hearing. "I apologize sincerely to the firm for my actions."

Haber, 59, had been a partner at Grant Thornton from 1993 to 2012 in the firm's New York offices.

As part of his plea, he has agreed to not appeal any order requiring up to $4.34 million in restitution. He also agreed to forfeit $3.97 million, as well as all rights to his downtown Manhattan apartment and $1.8 million in a brokerage account.

Haber was arrested in February in connection with the theft, in which Haber stole $3.97 million in payments intended for Grant Thornton, a court document said.

Grant Thornton is the sixth-largest accounting firm globally with $4.2 billion in revenues in 2012, according to International Accounting Bulletin.

The firm was not named in court documents, but a spokesman for Grant Thornton previously confirmed its role and said it cooperated with the investigation. Grant Thornton terminated Haber in July, charging documents said.

Tim Blair, a spokesman for the firm, said Wednesday the firm was "pleased that the authorities have resolved this matter swiftly."

At a hearing on Wednesday, Haber admitted to telling clients to mail checks directly to his office instead of through the normal processing channel. He then deposited the checks into a bank account he controlled, Haber said.

Charging documents said Haber then used the money for personal expenses, including his New York apartment's mortgage, according to charging documents.

Sentencing before U.S. District Judge Kevin Castel is set for December 13.

Haber faces a maximum 20 years in prison. Under a plea agreement detailed in court, prosecutors have stipulated to a sentencing guideline of 51 to 61 months in prison and a fine of $10,000 to $100,000.

The case is U.S. v. Haber, U.S. District Court, Southern District of New York, 13-cr-434.

(Additional reporting by Dena Aubin; editing by Andrew Hay)

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This post was made using the Auto Blogging Software from WebMagnates.org This line will not appear when posts are made after activating the software to full version.

Former Grant Thornton partner pleads guilty to stealing $4 million

By Nate Raymond

NEW YORK | Wed Aug 21, 2013 1:46pm EDT

NEW YORK (Reuters) - A former partner at Grant Thornton pleaded guilty on Wednesday to stealing nearly $4 million in client payments to the global accounting firm.

Craig Haber, who prosecutors said diverted money to his own bank accounts between 2004 and 2012, pleaded guilty to a charge of mail fraud in federal court in New York.

"I knew my conduct was wrong," Haber said at a court hearing. "I apologize sincerely to the firm for my actions."

Haber, 59, had been a partner at Grant Thornton from 1993 to 2012 in the firm's New York offices.

As part of his plea, he has agreed to not appeal any order requiring up to $4.34 million in restitution. He also agreed to forfeit $3.97 million, as well as all rights to his downtown Manhattan apartment and $1.8 million in a brokerage account.

Haber was arrested in February in connection with the theft, in which Haber stole $3.97 million in payments intended for Grant Thornton, a court document said.

Grant Thornton is the sixth-largest accounting firm globally with $4.2 billion in revenues in 2012, according to International Accounting Bulletin.

The firm was not named in court documents, but a spokesman for Grant Thornton previously confirmed its role and said it cooperated with the investigation. Grant Thornton terminated Haber in July, charging documents said.

Tim Blair, a spokesman for the firm, said Wednesday the firm was "pleased that the authorities have resolved this matter swiftly."

At a hearing on Wednesday, Haber admitted to telling clients to mail checks directly to his office instead of through the normal processing channel. He then deposited the checks into a bank account he controlled, Haber said.

Charging documents said Haber then used the money for personal expenses, including his New York apartment's mortgage, according to charging documents.

Sentencing before U.S. District Judge Kevin Castel is set for December 13.

Haber faces a maximum 20 years in prison. Under a plea agreement detailed in court, prosecutors have stipulated to a sentencing guideline of 51 to 61 months in prison and a fine of $10,000 to $100,000.

The case is U.S. v. Haber, U.S. District Court, Southern District of New York, 13-cr-434.

(Additional reporting by Dena Aubin; editing by Andrew Hay)

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SAC Capital pleads not guilty; reinsurance unit eyed

By Bernard Vaughan and Svea Herbst-Bayliss

Fri Jul 26, 2013 6:55pm EDT

n">(Reuters) - Billionaire investor Steven A. Cohen's hedge fund pleaded not guilty on Friday to insider trading charges in federal court, as questions also surfaced about the future of SAC Capital's Bermuda-based reinsurance unit, SAC Re.

Ratings company, A.M. Best Co., and the Bermuda Monetary Authority, which regulates insurers on the island, said they were monitoring developments one day after prosecutors charged the hedge fund and various affiliates with four criminal counts of securities fraud and one count of wire fraud.

A year ago A.M. Best gave SAC Re a top rating. But if the company were to cut its rating of the unit, which had $567.8 million in assets at the end of 2012, in the wake of criminal charges, people may shy away from doing business with the insurer, industry experts said.

"Buyers of reinsurance from SAC Re will be on the phone with their brokers telling them to move out," said Andrew Barile, an independent industry consultant. Buyers have plenty of choice in the reinsurance industry, experts said, adding it would be relatively easy to change companies.

Separately, outside investors with the $14 billion hedge fund also expressed some uncertainty about what to do with their money only weeks before an August 16 redemption deadline.

SAC had presided over a culture from 1999 to 2010 where employees flouted the law and were encouraged to tap their personal networks for inside information about publicly traded companies, prosecutors said on Thursday.

The criminal case imperils the future of one of Wall Street's largest hedge funds and could end Cohen's career of managing outside money. His average annualized returns of 25 percent beat most of his rivals.

Prosecutors did not file criminal charges against Cohen personally, but the U.S. Securities and Exchange Commission has filed a separate civil case against him for failing to supervise two employees.

The SEC is expected to delay its civil case while the criminal trial proceeds. The U.S. attorney also brought a civil case seeking forfeitures and money laundering penalties from Cohen.

The government's evidence in the criminal case includes a lot of "court-authorized wiretaps" and "a large number of electronic recordings," such as emails and instant messages, Antonia Apps, an assistant U.S. attorney who has prosecuted other insider-trading cases, told U.S. District Judge Laura Taylor Swain.

Jonathan Gasthalter, a spokesman for SAC, declined to comment. A representative for SAC Re did not return a call seeking comment.

U.S. Attorney Preet Bharara, who brought the charges, declined to give a specific dollar figure for the amount his office is seeking from SAC. But in court papers, prosecutors contend SAC made "hundreds of millions of dollars" in illegal profits from insider trading, and the penalties they seek could be up to three times the amount of the illegal gains.

SAC sought to assure investors its assets were not frozen and redemptions would continue unhindered. Skittish investors have already withdrawn roughly $4 billion from the firm in the first half of the year.

Blackstone Group, Ironwood Capital and Magnitude Capital all withdrew funds earlier this year. Morgan Stanley, which had client money invested with Cohen also took steps to reduce exposure to SAC in the months leading up to the indictment, according to a person familiar with situation.

Morgan Stanley's exposure is now minimal. A spokeswoman for the bank declined to comment on whether the bank would seek to redeem its remaining funds in the wake of the criminal charges.

While some investors have been loyal to Cohen, one person, who declined to be named, said the new charges worried him. "The real worry is that the regulators are relentless and their sights are set on Steve and they will not stop at nothing to bring him down."

Others said they would wait a little longer to make a decision and await for any communication from the fund. If investors submit a redemption request by August 16, they will get half their cash back by the end of September and the remainder by the end of December.

WAITING FOR EVIDENCE The strength of U.S. prosecutors' case will become clearer once the evidence they are planning to use is laid out, legal experts said.

"Over the next six months you'll get a sense for why the DOJ charged the entity and failed to charge any of the high-ranking executives," said defense lawyer Andrew Wise, a partner at Miller Chevalier.

Several former SAC employees, including Noah Freeman, Jon Horvath, Donald Longueuil and Wesley Wang, have pleaded guilty to charges of criminal insider trading.

Judge Swain set a September 24 court date to discuss evidence.

SAC's lawyers on Friday included: Ted Wells, Daniel Kramer and Michael Gertzman of Paul, Weiss, Rifkind, Wharton & Garrison; and Martin Klotz and Michael Schachter of Willkie Farr & Gallagher.

The criminal case is U.S. v. SAC Capital Advisors LP et al, U.S. District Court, Southern District of New York, No. 13-cr-00541. The civil case is U.S. v. SAC Capital Advisors LP et al in the same court, No. 13-05182.

(Reporting by Bernard Vaughan in New York and Svea Herbst-Bayliss in Boston; Additional reporting by Sarah N. Lynch in Washington, Emily Flitter and Katya Wachtel in New York; Editing by Matthew Goldstein, Paritosh Bansal, Gerald E. McCormick, Jeffrey Benkoe and Leslie Gevirtz)

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SAC Capital pleads not guilty; reinsurance unit eyed

By Bernard Vaughan and Svea Herbst-Bayliss

Fri Jul 26, 2013 6:55pm EDT

n">(Reuters) - Billionaire investor Steven A. Cohen's hedge fund pleaded not guilty on Friday to insider trading charges in federal court, as questions also surfaced about the future of SAC Capital's Bermuda-based reinsurance unit, SAC Re.

Ratings company, A.M. Best Co., and the Bermuda Monetary Authority, which regulates insurers on the island, said they were monitoring developments one day after prosecutors charged the hedge fund and various affiliates with four criminal counts of securities fraud and one count of wire fraud.

A year ago A.M. Best gave SAC Re a top rating. But if the company were to cut its rating of the unit, which had $567.8 million in assets at the end of 2012, in the wake of criminal charges, people may shy away from doing business with the insurer, industry experts said.

"Buyers of reinsurance from SAC Re will be on the phone with their brokers telling them to move out," said Andrew Barile, an independent industry consultant. Buyers have plenty of choice in the reinsurance industry, experts said, adding it would be relatively easy to change companies.

Separately, outside investors with the $14 billion hedge fund also expressed some uncertainty about what to do with their money only weeks before an August 16 redemption deadline.

SAC had presided over a culture from 1999 to 2010 where employees flouted the law and were encouraged to tap their personal networks for inside information about publicly traded companies, prosecutors said on Thursday.

The criminal case imperils the future of one of Wall Street's largest hedge funds and could end Cohen's career of managing outside money. His average annualized returns of 25 percent beat most of his rivals.

Prosecutors did not file criminal charges against Cohen personally, but the U.S. Securities and Exchange Commission has filed a separate civil case against him for failing to supervise two employees.

The SEC is expected to delay its civil case while the criminal trial proceeds. The U.S. attorney also brought a civil case seeking forfeitures and money laundering penalties from Cohen.

The government's evidence in the criminal case includes a lot of "court-authorized wiretaps" and "a large number of electronic recordings," such as emails and instant messages, Antonia Apps, an assistant U.S. attorney who has prosecuted other insider-trading cases, told U.S. District Judge Laura Taylor Swain.

Jonathan Gasthalter, a spokesman for SAC, declined to comment. A representative for SAC Re did not return a call seeking comment.

U.S. Attorney Preet Bharara, who brought the charges, declined to give a specific dollar figure for the amount his office is seeking from SAC. But in court papers, prosecutors contend SAC made "hundreds of millions of dollars" in illegal profits from insider trading, and the penalties they seek could be up to three times the amount of the illegal gains.

SAC sought to assure investors its assets were not frozen and redemptions would continue unhindered. Skittish investors have already withdrawn roughly $4 billion from the firm in the first half of the year.

Blackstone Group, Ironwood Capital and Magnitude Capital all withdrew funds earlier this year. Morgan Stanley, which had client money invested with Cohen also took steps to reduce exposure to SAC in the months leading up to the indictment, according to a person familiar with situation.

Morgan Stanley's exposure is now minimal. A spokeswoman for the bank declined to comment on whether the bank would seek to redeem its remaining funds in the wake of the criminal charges.

While some investors have been loyal to Cohen, one person, who declined to be named, said the new charges worried him. "The real worry is that the regulators are relentless and their sights are set on Steve and they will not stop at nothing to bring him down."

Others said they would wait a little longer to make a decision and await for any communication from the fund. If investors submit a redemption request by August 16, they will get half their cash back by the end of September and the remainder by the end of December.

WAITING FOR EVIDENCE The strength of U.S. prosecutors' case will become clearer once the evidence they are planning to use is laid out, legal experts said.

"Over the next six months you'll get a sense for why the DOJ charged the entity and failed to charge any of the high-ranking executives," said defense lawyer Andrew Wise, a partner at Miller Chevalier.

Several former SAC employees, including Noah Freeman, Jon Horvath, Donald Longueuil and Wesley Wang, have pleaded guilty to charges of criminal insider trading.

Judge Swain set a September 24 court date to discuss evidence.

SAC's lawyers on Friday included: Ted Wells, Daniel Kramer and Michael Gertzman of Paul, Weiss, Rifkind, Wharton & Garrison; and Martin Klotz and Michael Schachter of Willkie Farr & Gallagher.

The criminal case is U.S. v. SAC Capital Advisors LP et al, U.S. District Court, Southern District of New York, No. 13-cr-00541. The civil case is U.S. v. SAC Capital Advisors LP et al in the same court, No. 13-05182.

(Reporting by Bernard Vaughan in New York and Svea Herbst-Bayliss in Boston; Additional reporting by Sarah N. Lynch in Washington, Emily Flitter and Katya Wachtel in New York; Editing by Matthew Goldstein, Paritosh Bansal, Gerald E. McCormick, Jeffrey Benkoe and Leslie Gevirtz)

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SAC Capital pleads not guilty; reinsurance unit eyed

By Bernard Vaughan and Svea Herbst-Bayliss

(Reuters) - Billionaire investor Steven A. Cohen's hedge fund pleaded not guilty on Friday to insider trading charges in federal court, as questions also surfaced about the future of SAC Capital's Bermuda-based reinsurance unit, SAC Re.

Ratings company, A.M. Best Co., and the Bermuda Monetary Authority, which regulates insurers on the island, said they were monitoring developments one day after prosecutors charged the hedge fund and various affiliates with four criminal counts of securities fraud and one count of wire fraud.

A year ago A.M. Best gave SAC Re a top rating. But if the company were to cut its rating of the unit, which had $567.8 million in assets at the end of 2012, in the wake of criminal charges, people may shy away from doing business with the insurer, industry experts said.

"Buyers of reinsurance from SAC Re will be on the phone with their brokers telling them to move out," said Andrew Barile, an independent industry consultant. Buyers have plenty of choice in the reinsurance industry, experts said, adding it would be relatively easy to change companies.

Separately, outside investors with the $14 billion hedge fund also expressed some uncertainty about what to do with their money only weeks before an August 16 redemption deadline.

SAC had presided over a culture from 1999 to 2010 where employees flouted the law and were encouraged to tap their personal networks for inside information about publicly traded companies, prosecutors said on Thursday.

The criminal case imperils the future of one of Wall Street's largest hedge funds and could end Cohen's career of managing outside money. His average annualized returns of 25 percent beat most of his rivals.

Prosecutors did not file criminal charges against Cohen personally, but the U.S. Securities and Exchange Commission has filed a separate civil case against him for failing to supervise two employees.

The SEC is expected to delay its civil case while the criminal trial proceeds. The U.S. attorney also brought a civil case seeking forfeitures and money laundering penalties from Cohen.

The government's evidence in the criminal case includes a lot of "court-authorized wiretaps" and "a large number of electronic recordings," such as emails and instant messages, Antonia Apps, an assistant U.S. attorney who has prosecuted other insider-trading cases, told U.S. District Judge Laura Taylor Swain.

Jonathan Gasthalter, a spokesman for SAC, declined to comment. A representative for SAC Re did not return a call seeking comment.

U.S. Attorney Preet Bharara, who brought the charges, declined to give a specific dollar figure for the amount his office is seeking from SAC. But in court papers, prosecutors contend SAC made "hundreds of millions of dollars" in illegal profits from insider trading, and the penalties they seek could be up to three times the amount of the illegal gains.

SAC sought to assure investors its assets were not frozen and redemptions would continue unhindered. Skittish investors have already withdrawn roughly $4 billion from the firm in the first half of the year.

Blackstone Group, Ironwood Capital and Magnitude Capital all withdrew funds earlier this year. Morgan Stanley, which had client money invested with Cohen also took steps to reduce exposure to SAC in the months leading up to the indictment, according to a person familiar with situation.

Morgan Stanley's exposure is now minimal. A spokeswoman for the bank declined to comment on whether the bank would seek to redeem its remaining funds in the wake of the criminal charges.

While some investors have been loyal to Cohen, one person, who declined to be named, said the new charges worried him. "The real worry is that the regulators are relentless and their sights are set on Steve and they will not stop at nothing to bring him down."

Others said they would wait a little longer to make a decision and await for any communication from the fund. If investors submit a redemption request by August 16, they will get half their cash back by the end of September and the remainder by the end of December.

WAITING FOR EVIDENCE The strength of U.S. prosecutors' case will become clearer once the evidence they are planning to use is laid out, legal experts said.

"Over the next six months you'll get a sense for why the DOJ charged the entity and failed to charge any of the high-ranking executives," said defense lawyer Andrew Wise, a partner at Miller Chevalier.

Several former SAC employees, including Noah Freeman, Jon Horvath, Donald Longueuil and Wesley Wang, have pleaded guilty to charges of criminal insider trading.

Judge Swain set a September 24 court date to discuss evidence.

SAC's lawyers on Friday included: Ted Wells, Daniel Kramer and Michael Gertzman of Paul, Weiss, Rifkind, Wharton & Garrison; and Martin Klotz and Michael Schachter of Willkie Farr & Gallagher.

The criminal case is U.S. v. SAC Capital Advisors LP et al, U.S. District Court, Southern District of New York, No. 13-cr-00541. The civil case is U.S. v. SAC Capital Advisors LP et al in the same court, No. 13-05182.

(Reporting by Bernard Vaughan in New York and Svea Herbst-Bayliss in Boston; Additional reporting by Sarah N. Lynch in Washington, Emily Flitter and Katya Wachtel in New York; Editing by Matthew Goldstein, Paritosh Bansal, Gerald E. McCormick, Jeffrey Benkoe and Leslie Gevirtz)

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Manager of defunct hedge fund pleads guilty to fraud

By Terry Baynes

(Reuters) - A former hedge fund manager pleaded guilty on Friday to defrauding investors in a $12.6 million scheme, more than five years after the fund collapsed under the weight of failed real estate loans.

Lloyd Barriger, who operated Gaffken & Barriger, a Monticello, New York-based investment fund, pleaded guilty in White Plains federal court to charges of securities fraud, mail fraud and conspiracy, the U.S. Attorney's Office said in a statement.

Federal prosecutors accused Barriger of bilking more than 70 investors from July 2006 to March 2008 by soliciting millions of dollars for a fund he falsely presented as a safe and liquid investment. He continued to promise investors an 8 percent return, even as the fund defaulted on a $20 million line of credit and held an increasingly delinquent portfolio, according to an indictment filed in February.

"Once again, belief in hedge funds by hopeful investors proved to be sadly misplaced," Manhattan U.S. Attorney Preet Bharara said in a statement. "In this case, the perpetrator was not in a sleek Manhattan building but rather in Sullivan County."

Barriger's lawyer, federal defender Mark Gombiner, did not immediately respond to an email seeking comment.

Barriger, 57, of Damascus, Pennsylvania, faces a maximum sentence of 65 years in prison. U.S. District Judge Cathy Seibel, who is overseeing the case, scheduled a sentencing hearing for November 15.

In addition to a prison term, federal prosecutors will seek at least $12.6 million in forfeited assets, representing the proceeds of the charged crimes, the indictment said.

The case is USA v. Barriger, U.S. District Court for the Southern District of New York, No. 11-416.

(Reporting By Terry Baynes in New York; Editing by Bill Trott)

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Hedge fund pleads not guilty to US fraud charges

NEW YORK (AP) — Prosecutors said a large volume of evidence including electronic messages, court-ordered wiretaps and consensual recordings is stacked against a Connecticut-based hedge fund that pleaded not guilty Friday to criminal charges accusing it of letting insider trading flourish for more than a decade.

Assistant U.S. Attorney Antonia Apps told a federal judge in Manhattan that investigators had "voluminous" evidence against SAC Capital Advisors, a Stamford, Conn.-based firm owned by billionaire Steven A. Cohen.

She said the evidence included "electronic messages, instant messages, court-ordered wiretaps and consensual recordings."

The plea was entered by Peter Nussbaum, SAC's longtime general counsel, and came a day after the company was charged with wire and securities fraud, accused of making hundreds of millions of dollars illegally. Federal prosecutors described a culture at SAC that permitted, if not encouraged, insider trading.

Prosecutors said the victims were large companies whose inside information was stolen and traded upon. The next hearing was set for Sept. 24.

Outside court, lawyers for the company including Nussbaum declined to comment and paced on a sidewalk looking for cars to pick them up as the media followed.

SAC said in a statement after the charges were announced Thursday that it will continue normal operations. It said it "has never encouraged, promoted or tolerated insider trading and takes its compliance and management obligations seriously." The company declined through a spokesman to comment Friday.

Cohen has not been charged and was not in court Friday. He is referenced in court papers only as the "SAC owner" who "enabled and promoted" insider trading practices.

At a news conference Thursday, U.S. Attorney Preet Bharara said SAC "trafficked in inside information on a scale without any known precedent in the history of hedge funds."

"When so many people from a single hedge fund have engaged in insider trading, it is not a coincidence," the prosecutor said. "It is, instead, the predictable product of substantial and pervasive institutional failure."

He declined to comment on whether Cohen would be charged, saying: "I'm not going to say what tomorrow may or may not bring."

From 1999 to 2010, the company earned hundreds of millions of dollars illegally as its portfolio managers and analysts traded on inside information from at least 20 public companies, Bharara said.

The possibility that the criminal case could topple the firm, which once managed $15 billion in assets, led the prosecutor to note that the government was not seeking to freeze SAC's assets. Bharara added that prosecutors were "mindful to minimize risk to third-party investors."

Still, the government in one lawsuit sought SAC's forfeiture of "any and all" assets.

The charges came less than a week after federal regulators accused Cohen in a related civil case of failing to prevent insider trading at the firm. While the Justice Department's action targets SAC but not Cohen directly, the civil case brought by the Securities and Exchange Commission seeks to effectively shut him down by barring him from managing investor funds.

___

Associated Press writers Christina Rexrode in New York and Marcy Gordon in Washington contributed to this report.

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SAC Capital pleads not guilty to insider trading charges

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Nashua man has been found not guilty of sexually assaulting a young girl

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