See:
Slow Saturday Special: SEC $ettles With SAC
Slow Saturday Special: Discreetly Arresting SAC's Steinberg
"SEC files charges against hedge fund founder Steven A. Cohen" by Marcy Gordon | AP Business Writer, July 19, 2013
WASHINGTON — The Securities and Exchange Commission on Friday filed civil charges against Steven A. Cohen that accused the billionaire hedge-fund manager of failing to prevent insider trading.
"Civil" charges?
Cohen, 57, founded and runs SAC Capital Advisors, among the largest hedge funds that at one point managed assets of more than $15 billion. The government has called the SAC Capital case one of the biggest insider-trading fraud cases in history.
The SEC said Cohen failed to supervise two portfolio managers at the fund and prevent them from illegal insider trading. As a result of the trades, the fund reaped profits and avoided losses of more than $275 million, the SEC said.
Both managers provided information to Cohen that suggested they had access to inside information, the SEC said. Rather than report them, he praised one of the managers for the trades and rewarded the other with a $9 million bonus, according to the SEC.
The SEC is seeking unspecified fines against Cohen and to bar him from managing investor funds. The case will be heard by an administrative law judge at the SEC.
‘‘Cohen received highly suspicious information that should have caused any reasonable hedge fund manager in Cohen’s position to take prompt action to determine whether employees under his supervision were engaged in unlawful conduct and to prevent violations of the federal securities laws,’’ the SEC said.
A spokesman for SAC Capital said the allegations have ‘‘no merit’’ and Cohen ‘‘will fight this charge vigorously.’’
‘‘Steve Cohen acted appropriately at all times,’’ spokesman Jonathan Gasthalter said in a statement.
The SEC opted to pursue Cohen in an administrative proceeding rather than file a lawsuit against him in federal court. It could be easier for the agency to win the case before an administrative law judge on its own turf than in a civil trial. There are more lenient requirements for evidence that must be provided in an administrative proceeding. But there are also lower penalties.
Meaning no jail time.
‘‘They've opted for the home court advantage,’’ said John Coffee, a securities law professor at Columbia University.
Coffee said it is also significant that the SEC did not charge Cohen with insider trading. That suggests none of his subordinates ‘‘flipped’’ and told investigators that they provided Cohen with information, he said.
There is honor among thieves!
Portfolio managers Mathew Martoma and Michael Steinberg have each pleaded not guilty to criminal insider-trading charges. They face trials in November.
Martoma is accused of earning $9 million in bonuses after persuading a medical professor to leak secret data from an Alzheimer’s disease trial between 2006 and 2008. The government has alleged that Martoma’s inside information enabled other investment professionals at SAC to earn a quarter-billion dollars illegally.
Pharmaceutical$ is really big money.
Steinberg is accused of earning more than 1.4 million illegally in connection with trades involving Dell and Nvidia in 2008 and 2009.
The SEC’s action against SAC Capital stemmed from the wide-ranging government investigation of insider trading at US hedge funds. Earlier this year, an affiliate of SAC Capital agreed to pay $615 million to resolve the SEC’s insider trading charges against the firm. The agency said it was the largest insider trading settlement ever.
Cohen is one of the highest profile figures in American finance and one of the world’s richest men. He is among the handful of upper-tier hedge fund managers who pull in about $1 billion a year in compensation.
That's nowhere near Buffett territory.
--more--"
After reading the bu$ine$$ section of the Boston Globe for a time you realize the health of certain corporate interests -- banking, pharmaceutical, oil, and war -- are their main concerns.
UPDATE:
"Hedge fund may see cash flow out" by Peter Lattman and Ben Protess | New York Times, June 03, 2013
NEW YORK — The hedge fund SAC Capital Advisors is bracing for investors to pull out as much as several billion dollars by a Monday deadline. The withdrawals have stepped up as a separate deadline looms for law enforcement officials investigating the firm.
Over the next several weeks, the authorities must decide whether to bring a criminal case against SAC related to suspicious trading in two drug stocks. They have already charged a former SAC employee connected to those trades, which involved the fund’s billionaire founder, Steven A. Cohen. Authorities have been exploring new avenues for bringing a criminal case against the firm and possibly a civil action against Cohen, people briefed on the case said.
That has caused investors to grow increasingly worried....
You know, the important people in this world.
--more--"
