Friday, 25 July 2014
Last updated 4 hours ago
May 31 2011 | 10:49am ET
A well-known institutional investor is abandoning SAC Capital Advisors, worried that the government will stop at nothing to bring down the hedge fund giant.
The unidentified investor has submitted a redemption request to the $14 billion fund, InstitutionalInvestor.com reports. "We don't want to be fickle," the investor, who requested anonymity, said. "We hate doing this. But the government seems so intent now in getting them and there are additional SAC-related characters tainted. Some dealt with the same stocks at SAC."
Indeed, SAC looks like one of the central targets of the ongoing Justice Department insider-trading investigation, although neither the firm nor any of its current employees has been charged with any wrongdoing. But recent months have brought more and more reports that investigators are focusing on the firm, including founder Steven Cohen's own trading account.
SAC is also the subject of a congressional investigation, and instant-messages between the firm's employees and expert network Primary Global Research, the firm at the center of the Justice Dept. probe, is part of the mountain of evidence gathered in that case.
SAC has been the subject of at least two separate insider-trading probes over the past three years, and several SAC alumni have been implicated or pleaded guilty in the Galleon Group and Primary Global insider-trading cases. And former FrontPoint Partners healthcare fund manager Joseph Skowron, charged last month with insider trading, is another SAC alum.
SAC has denied any wrongdoing and has said it is "outraged" by the crimes of Noah Freeman and Donald Longueuil, two former SAC portfolio managers who have pleaded guilty in the Primary Global case. And most investors seem to be sticking by the firm; even the redeeming investor told II that the firm "has the number one compliance department in the industry."
Another investor told II, "they will probably get redemptions." But not from them.
"We will sit tight until there is a real reason to do anything," the investor said. "It is all noise."
Jul 8 2014 | 10:48am ET
The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…