The former hedge fund of one of the industry's most prominent figures has reached a settlement with investors.

The former hedge fund of billionaire Steven A Cohen, called SAC Capital Advisors, will reportedly pay $135 million to settle a lawsuit by investors in the drugmaker Elan Corp, who said they lost money because of insider trading by one of his portfolio managers.

The preliminary class-action settlement with SAC, now known as Point72 Asset Management, was filed yesterday with the federal court in Manhattan, and requires approval by US District Judge John Koeltl. The settlement resolves claims over an estimated $275 million of illegal trading gains in Elan and the drugmaker Wyeth by Mathew Martoma, who worked at SAC's CR Intrinsic Investors unit, based on tips from a Michigan doctor about a 2008 Alzheimer's drug trial, according to a report by Reuters. (This news service has contacted Point72 for further comment and may update in due course.)

Since the saga erupted, Point72 was created about two years ago as a single family office entity that does not, for a period of time, take in outside money as part of an agreement with regulators. This news service has interviewed Point72 about the steps it is taking to tighten compliance. (See here.)

"We are pleased to have resolved this matter and close the books on this chapter of SAC-era litigation," Mark Kerr, spokesperson for Point72, told this publication when asked about the matter.

SAC pleaded guilty to fraud in 2013 and paid $1.8 billion in criminal and civil settlements with US authorities, and settled with Wyeth shareholders for $10 million last December.
Martoma, meanwhile, is appealing his February 2014 insider trading conviction, while he serves a nine-year prison term, reports said. 

No criminal charges were brought against Cohen.