One of Wall Street’s biggest and most successful hedge fund companies was a hotbed of insider trading and its embattled billionaire owner wanted to hear no evil, prosecutors said in an indictment unsealed Thursday that claimed the firm earned hundreds of millions of dollars illegally.
The criminal indictment and civil lawsuits brought against SAC Capital Advisors and related companies did not name billionaire Steven A. Cohen as a defendant, referencing him only as the SAC owner who enabled and promoted insider trading practices.
At a news conference, U.S. Attorney Preet Bharara said SAC trafficked in inside information on a scale without any known precedent in the history of hedge funds.
He declined to comment on whether Cohen would be charged. The possibility that the criminal case could topple the Stamford, Conn., firm, which once managed $15 billion in assets, led the prosecutor to note that the government was not seeking to freeze SAC’s assets. Bharara added that prosecutors were mindful to minimize risk to third-party investors.
Zimmer earnings off 29% in quarter
Zimmer Holdings Inc. reported second-quarter earnings of $152 million, or 89 cents per diluted common share, a 29 percent decline from the $215 million, or $1.22 a share, posted for the same three months of 2012.
Profit was on net sales of $1.17 billion, a 4 percent increase from the previous year’s second quarter.
The Warsaw-based maker of orthopedic devices set aside $47 million during the period ended June 30 to pay existing and anticipated claims associated with the Durom Acetabular Component, a part formerly used in some total hip replacements.
During the quarter, Zimmer used $69 million cash to buy 880,000 shares of its own stock. The company also acquired U.S.-based Knee Creations LLC and Germany-based Normed Medizin-Technik GmbH.
Durable goods orders rise 4.2 percent in June
Orders for long-lasting U.S. factory goods rose in June, bolstered by a surge in aircraft demand and more business spending. The increase suggests companies are more confident in the economy and could boost economic growth in the second half of the year.
The Commerce Department said Thursday that orders for durable goods increased 4.2 percent last month. That followed a 5.2 percent gain in May, which was revised higher.
Most of the gain occurred because aircraft orders, which are volatile month to month, jumped 31.4 percent. Boeing said it received orders for 287 planes in June, up from 232 in May. Excluding autos and airplanes, orders were unchanged.
Orders that signal planned business investment, which exclude volatile transportation and defense orders, increased in June for the fourth straight month. The 0.7 percent gain last month was buoyed by machinery demand.
Jobless aid claims increase to 343,000
The number of Americans applying for unemployment benefits rose by 7,000 last week to a seasonally adjusted 343,000.
The increase in the week ending July 20 follows a drop of 22,000 the previous week. But the broader trend is consistent with an improving job market.
The four-week average, which smooths out weekly fluctuations, fell 1,250 to 345,250.