UPDATE 1-SAC Capital deal with U.S. prosecutors gets closer -source
(Updates with details of potential deal)
NEW YORK, Oct 17 (Reuters) - A deal between SAC Capital and U.S. prosecutors to resolve a criminal insider trading case against the firm could come in a few days, a source familiar with the matter said on Thursday.
Any potential deal between Steven A. Cohen's SAC Capital and federal authorities would likely involve some admission of liability by the firm and a payment of a penalty of more than $1 billion, the source said.
A settlement which has been under negotiations for several weeks would be a blow to Cohen and his reputation as one of the greatest stock traders of his generation. But people familiar with the billionaire trader say he has been telling people he is looking to put the long investigation of his firm behind him.
The Wall Street Journal and The New York Times both previously reported Thursday that a deal between the hedge fund and prosecutors was close and could involve a penalty of more than $1 billion.
The Journal reported the potential settlement would give Cohen's firm credit for agreeing to pay more than $600 million earlier this year to settle a civil insider trading lawsuit filed against the firm by the U.S. Securities and Exchange Commission.
Reuters and other news organizations have previously reported that Cohen and prosecutors were negotiating a potential settlement of up to $2 billion. Reuters has reported that Cohen has told associates he has wanted to settle the criminal case against his firm.
Spokesmen for prosecutors, the Federal Bureau of Investigation and SAC Capital declined to comment.
SAC Capital is in the process of returning much of the $5 billion in outside money it manages for others. About $6 billion of the firm's money belongs to Cohen and his employees.
This summer, U.S. prosecutors indicted the billionaire' s firm, saying SAC fostered a culture in which employees flouted the law and were encouraged to tap their personal networks of contacts for inside information about publicly traded companies.
Cohen has not been charged with criminal wrongdoing. But the SEC did file an administrative proceeding against him charging him with failing to properly supervise the activities of traders at his 900-employee fund.
The SEC action could bar Cohen from managing money for outside investors.
(Reporting by Matthew Goldstein and Katya Wachtel; Editing by Gerald E. McCormick and Cynthia Osterman)