Pfizer to Receive $29 Million from SEC Case Involving Steven A. Cohen’s Hedge Fund

Pfizer has reached an agreement with the U.S. Securities and Exchange Commission to receive $29 million to settle a dispute related to the regulator’s 2013 insider trading case involving Steven A. Cohen’s former hedge fund, SAC Capital Management. This settlement amount represents a significant portion of the $75.2 million that remained from SAC’s previous $601.8 million settlement over trades in drug companies Wyeth and Elan by Mathew Martoma, a former SAC employee who was later found guilty of securities fraud and conspiracy. The remaining $46.2 million will go to the U.S. Treasury.

The dispute stemmed from a November 2024 ruling by U.S. District Judge Victor Marrero in Manhattan, which Pfizer was appealing. The ruling stated that Pfizer was not entitled to any of the remaining funds after investors in Wyeth and Elan had been compensated for their losses because Wyeth was not considered one of Martoma’s victims. Despite Pfizer’s argument that it should receive the entire $75.2 million due to a neurologist’s fiduciary duty to Wyeth, the judge sided with the SEC, stating that the full amount should go to the U.S. Treasury.

As part of the settlement, Pfizer will drop its appeal, pending the judge’s approval. The company believes that this resolution is in the public’s best interest as it enforces securities laws, addresses violations with monetary relief, and provides compensation to victims. The SEC has not issued a statement regarding the settlement at this time.

Martoma, who worked at SAC’s CR Intrinsic Investors unit, was sentenced to nine years in prison after his conviction in 2014. Cohen, the billionaire behind SAC Capital, was not charged criminally. He rebranded SAC Capital as Point72 Asset Management in 2014 and purchased the New York Mets baseball team in 2020. According to Forbes magazine, Cohen’s net worth is estimated at $23 billion.

This settlement brings closure to a long-standing legal battle between Pfizer and the SEC, resolving the disagreement over the allocation of funds from the previous insider trading case involving SAC Capital Management. Pfizer’s decision to accept the $29 million settlement demonstrates its commitment to upholding securities laws and ensuring that justice is served in cases of financial misconduct.