Breaking News from CNBC's Kate Kelly: SAC Was Deep into Settlement Talks with DOJ in Early May
WHEN: TODAY, MONDAY, MAY 20TH
WHERE: CNBC'S "FAST MONEY HALFTIME REPORT"
Following is the unofficial transcript of breaking news from CNBC's Kate Kelly. All references must be sourced to CNBC.
KATE KELLY: SCOTT NEVER A DULL MOMENT ON THIS STORY I AM TOLD THAT EARLIER THIS MONTH AND IN FACT AS RECENTLY AS ABOUT A WEEK SAC OFFICIALS WERE EXPRESSING CONFIDENCE THAT THEY WERE CLOSE INTO A SETTLEMENT WITH THE GOVERNMENT'S PROSECUTORS TO RESOLVE THE REMAINING ISSUES CONNECTED WITH ALLEGATIONS OF INSIDER TRADING ON TWO PHARMACEUTICAL TRADES FROM 2008 AMONG OTHERS THAT WERE HANGING OVER THE FIRM WITH A POSSIBILITY OF INDICTMENTS OF STEVE COHEN THE FOUNDER AND THE SAC FIRM MORE BROADLY. THAT THEY WERE DEEPLY INTO SETTLEMENT TALKS STARTING IN EARLY MAY AND APPEARED CONFIDENT THAT THEY WOULD BE ABLE TO RESOLVE THOSE TALKS AFFIRMATIVELY INVOLVING A FINE THAT SAC WOULD PAY AND AN AGREEMENT WITH THE GOVERNMENT THAT THE GOVERNMENT WOULD NOT CONTINUE PURSUING A CRIMINAL CASE AGAINST THEM. THOSE TALKS HOWEVER APPEAR TO HAVE BROKEN DOWN AS OF LAST WEEK.AGAIN, THE NEW YORK TIMES REPORTING THAT STEVE COHEN THE FOUNDER OF THE FIRM RECEIVED A SUBPOENA ASKING HIM TO TESTIFY BEFORE THE GRAND JURY AND ALSO THE FIRM TELLING INVESTORS THAT THEY ARE NO LONGER COOPERATING UNCONDITIONALLY WITH THE GOVERNMENT WOULD SEEM TO BE SIGNS THAT THOSE CONVERSATIONS WHILE PERHAPS NOT ENTIRELY DEAD HAVE BROKEN DOWN. I'VE ALSO HEARD THAT BLACKSTONE WHICH IS THEIR LARGEST EXTERNAL INVESTOR WITH ABOUT $410 MILLION IN SAC AT THE MOMENT DEFINITELY PLANS TO REDEEM SOME OF ITS MONEY THIS QUARTER IN TIME FOR THE JUNE 3RD DEADLINE. HOW MUCH COULD NOT BE DETERMINED IMMEDIATELY BUT AGAIN THEY $400 MILLION OR SO RIGHT NOW THEY ARE THE LARGEST EXTERNAL INVESTOR OF ALL THE FOLKS OUTSIDE OF THE OFFICIALS OF THE FIRM AND STEVE COHEN HIMSELF WHO HAVE MONEY IN THE FIRM SCOTT. SO THIS COULD BE CERTAINLY A SYMBOLIC BLOW IF AND WHEN IT HAPPENS AS WELL AS A FINANCIAL ONE.
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