Judge Approves Pfizer SEC Settlement in Cohen Hedge Fund Insider Trading Case

• The $29 million comes from $75.2 million left over from SAC Capital's original $601.8 million settlement over insider trading by Mathew Martoma, who was sentenced to nine years in prison
• Pfizer dropped its appeal seeking the full $75.2 million in exchange for the $29 million award, arguing it deserved compensation because a neurologist who tipped Martoma about a 2008 Alzheimer's drug trial owed fiduciary duty to Wyeth, which Pfizer acquired in 2009
• Steven Cohen was not criminally charged and rebranded SAC Capital as Point72 Asset Management in 2014

Judge Approves Pfizer SEC Settlement in Cohen Hedge Fund Insider Trading Case

A federal judge has approved a $29 million settlement for Pfizer to resolve a dispute with the SEC stemming from a 2013 insider trading case involving billionaire Steven A. Cohen's former hedge fund, SAC Capital Management.

Key Details:

U.S. District Judge Victor Marrero in Manhattan approved the settlement on Thursday, March 5. The $29 million represents Pfizer's portion of $75.2 million remaining from SAC Capital's original $601.8 million settlement. The remaining $46.2 million will go to the U.S. Treasury.

Background:

The original settlement involved illegal trades in drugmakers Wyeth and Elan by Mathew Martoma, a former SAC employee who received nine years in prison for securities fraud and conspiracy. Martoma received insider tips from a neurologist about a 2008 Alzheimer's drug trial. Pfizer acquired Wyeth in 2009.

Legal Proceedings:

Judge Marrero initially ruled in November 2024 that all remaining funds should go to the U.S. Treasury, arguing Wyeth wasn't one of Martoma's victims. Pfizer appealed, claiming it deserved the full $75.2 million because the neurologist who tipped Martoma owed Wyeth a fiduciary duty. The company agreed to drop its appeal in exchange for the $29 million settlement.

Noteworthy:

Steven A. Cohen was never criminally charged in the case. He rebranded SAC Capital as Point72 Asset Management in 2014.

Market Implications:

The settlement closes a longstanding legal dispute tied to one of the largest insider trading cases in U.S. history, providing financial recovery for Pfizer while reinforcing regulatory enforcement against securities fraud.