Saturday, January 23, 2016

Slow Saturday Special: SEC Cuts Cohen a Deal

"Cohen cuts SEC deal on insider trading" by Matthew Goldstein and Alexandra Stevenson New York Times   January 08, 2016

NEW YORK — The seemingly endless investigation of Steven A. Cohen, the billionaire investor, may finally have come to an end with a settlement with securities regulators that will bar him from managing money for outside investors for the next two years.

After that they will be keeping an eye on him (maybe he will follow GE).

The settlement, announced Friday, heads off a showdown with the Securities and Exchange Commission before an administrative law judge. The SEC had accused Cohen, 59, of failing to properly supervise Mathew Martoma, a former trader at Cohen’s onetime hedge fund who was convicted of insider trading.

The administrative proceeding had been delayed for several years at the request of federal prosecutors, who have all but wrapped up a nearly decade-long investigation into insider trading in the hedge fund industry and specifically at Cohen’s former firm, SAC Capital Advisors.

The settlement is likely to be seen as a victory for Cohen, one of the most successful stock traders on Wall Street, who was facing the prospect of a lifetime ban from managing money for outside investors. 

Must be joo big to tail.

Cohen was never charged by prosecutors but his former firm, which once managed nearly $16 billion, pleaded guilty to securities fraud charges and paid $1.8 billion in fines to prosecutors and securities regulators.

That's called a kickback.

In pleading guilty, Cohen’s hedge fund had to return outside money to investors.

After the plea, Cohen rebranded his firm as a family office called Point72 Asset Management that manages about $11 billion of his personal fortune.

Over the last year, Cohen has taken steps to increase compliance and oversight at Point72, with some on Wall Street seeing it as an effort by Cohen to gain the confidence of regulators and permit him to once again manage money for outside investors.

The SEC said Martoma gave Cohen information in 2008 that should have prompted the hedge fund manager to question whether Martoma was engaging in insider trading.

Still, Cohen did not admit or deny any wrongdoing in the settlement.

If Cohen seeks to manage money for outside investors beginning in 2018, the settlement requires him to obtain an independent consultant through the end of 2019.

Even before then, his family office will be subject to periodic examinations by the SEC and must retain an independent consultant to monitor its activities.

How brutal.

A spokesman for Cohen declined to comment.


At least someone got sentenced to prison -- or did he?