A federal judge has sanctioned a $29 million payment to Pfizer to end the company's dispute with the U.S. Securities and Exchange Commission related to the SEC's 2013 settlement with billionaire Steven A. Cohen's former hedge fund, SAC Capital Management.
U.S. District Judge Victor Marrero in Manhattan signed off on the payout on Thursday. The payment represents part of $75.2 million that remained after SAC's broader $601.8 million settlement addressing trades connected to Wyeth and Elan that were tied to Mathew Martoma, a former SAC employee who was later sentenced to nine years in prison following convictions for securities fraud and conspiracy.
Judge Marrero had previously determined, in a November 2024 ruling, that the entire $75.2 million should be remitted to the U.S. Treasury. That ruling rested in part on the finding that Wyeth - which Pfizer acquired in 2009 - was not a direct victim of Martoma's trades, according to the court's prior decision.
Pfizer contested that conclusion and appealed, arguing that it should receive the $75.2 million. The company's position was based on an assertion that a neurologist who provided a tip to Martoma in 2008 about an Alzheimer’s drug trial owed a fiduciary duty to Wyeth. Rather than continue the appeal, Pfizer agreed to abandon the challenge in exchange for the $29 million award.
Under the terms approved by the judge, the U.S. Treasury will receive the remaining $46.2 million of the $75.2 million pool. The settlement resolves the allocation dispute stemming from the SEC's enforcement action tied to SAC's settlement.
Steven A. Cohen himself was not criminally charged in the matter. The hedge fund he ran, SAC Capital Management, later changed its name to Point72 Asset Management in 2014.
Context and next steps
With the court's approval completed, Pfizer has received a portion of the remaining settlement funds and dropped its appeal. The remainder of the funds will be transferred to the Treasury as ordered by the court.