A federal judge in Manhattan has signed off on a $29 million payment to Pfizer, closing out a years-long tug-of-war over leftover cash from an insider-trading settlement tied to Steven A. Cohen’s former hedge fund. The payment resolves a dispute over roughly $75.2 million that remained after SAC Capital paid about $601.8 million to resolve SEC claims connected to trades in Wyeth and Elan. As part of the deal, Pfizer agreed to take the $29 million and drop its appeal.
Judge signs an indicative order
In a Feb. 11 filing, the parties asked the court to transfer $29,000,000 of the $75,232,529.11 in residual funds to Pfizer in exchange for Pfizer releasing any claim and dismissing its appeal, according to Justia. Judge Victor Marrero said he would grant the motion if the case is remanded by the Second Circuit, and the order spells out how the money will move while locking in the parties’ settlement.
How the SAC case led here
The leftover funds trace back to a much larger settlement announced in 2013, when CR Intrinsic, an affiliate of SAC Capital, agreed to pay more than $600 million to resolve SEC charges tied to trading in Elan and Wyeth securities, per the SEC. The trades at issue were later linked to portfolio manager Mathew Martoma, who was convicted in 2014 and sentenced to nine years in prison for securities fraud and conspiracy, according to the FBI.
What the transfer changes
The transaction, announced this week and reported by Reuters, resolves Pfizer’s appeal of a November 2024 ruling that had ordered the remaining funds to the U.S. Treasury. Under the new arrangement, $29 million will go to Pfizer and roughly $46.2 million will head to the Treasury once administrative steps are wrapped up. The settlement requires Pfizer to drop its appeal after the $29 million is transferred.
Why it matters
The deal ends a long-running administrative fight over money set aside to compensate victims of one of the most closely watched insider-trading schemes in recent memory and spares the courts another round of appeals. It also leaves untouched earlier findings that Wyeth, acquired by Pfizer in 2009, was not treated as a direct victim entitled to the leftover funds, a central legal issue in Pfizer’s challenge, as noted by Bloomberg Law. Lawyers say outcomes like this can influence how residual fair-fund money gets carved up in future enforcement cases.
Looking ahead, the court’s Feb. 11 filing says the transfer mechanics kick in if the Second Circuit remands the case, and the parties have agreed that Pfizer will dismiss its appeal after receiving the $29 million, per Justia. For Manhattan court-watchers, the order effectively closes the book on a high-profile chapter in the SEC’s insider-trading playbook.
