SAC Capital hit with $4.6 billion "racketeering" suit

Fri Feb 24, 2006

Using the same racketeering statutes that are often applied in cases against the mafia and drug cartels, the pharmaceutical company Biovail on February 22 filed a suit in New Jersey court accusing Steve Cohen's $7 billion SAC Capital Advisors of engineering and executing an elaborate stock manipulation scheme in 2003 and 2004 that battered the drugmaker's stock in an effort to produce profits from short-selling.

Canada's largest drug company is requesting a jury trial and is seeking $4.6 billion in damages from SAC, which it claims led a "bear attack" to devalue Biovail's stock and make it a sitting duck for profitable shorting activity. Also implicated in the alleged conspiracy and named in the suit are brokers, independent analysts and other hedge funds.

Prior to 2002, SAC Capital Advisors generated an average annual return in the...

ISSN: 2151-1845 / CDC10004H

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