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In an attempt to resolve a high-profile insider trading indictment filed in July 2013, S.A.C. Capital Advisors and its related entities (SAC) entered into a binding plea agreement with the government. Under that agreement, which is subject to court approval, SAC is required to pay a cumulative fine of $1.8 billion (including $616 million previously paid to settle two parallel SEC actions), plead guilty to all five counts in the indictment, and terminate its investment advisory business. In light of the unprecedented financial penalty, coupled with the requirement that each defendant admit that at least one employee engaged in insider trading, court approval of the agreement would appear to be a foregone conclusion. U.S. District Judge Laura Taylor Swain, however, in considering the portion of the plea agreement relating to the criminal fine, decided that she would defer judgment on whether or not to accept the plea until March 2014 in order to have additional time to review the plea agreement and allow a pre-sentence report to be filed before rendering her decision.1 Judge Swain’s decision to postpone her ruling likely stems in part from the fact that the parties presented her with a binding plea agreement under Rule 11(c)(1)(C) of the Federal Rules of Criminal Procedure. Swain can only accept or reject the binding plea agreement, and if she decides to accept the plea agreement she cannot alter the penalties imposed on SAC.

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