SEC Looking Into Second SAC Capital Deal

Oct 20 2011 | 8:54am ET

The U.S. Securities and Exchange Commission is looking into whether Steven A. Cohen’s Connecticut-based hedge fund SAC Capital Advisors used inside information to profit from Johnson & Johnson’s 2009 takeover of Cougar Biotechnology, reports the Wall Street Journal.

Citing people familiar with the matter, the paper says the regulator is also examining Leerink Swann, a Boston investment bank that runs an expert-network business specializing in the healthcare sector. The SEC is considering whether Leerink passed on information acquired in its role as Cougar's financial adviser to traders.

Neither SAC nor any of the other entities involved in the probe has been accused of wrongdoing by the SEC and the paper says it’s not clear if the inquiries, which have been underway for over a year, will result in charges.

At the end of 2008, SAC held 7,800 Cougar shares but by March 31, 2009, the hedge fund had upped that to 632,291 shares, according to SEC filings. Johnson & Johnson announced its Cougar deal on May 21 of that year.

In June, the WSJ reported that SAC was the focus of an SEC probe into trading around AstraZeneca's 2007 takeover of biotechnology firm MedImmune Inc. The firm and two of its affiliates sharply increased their stake in MedImmune during the first quarter of 2007 and then sold off all or most of those shares in the second quarter; the deal between MedImmune and AstraZeneca was announced on April 23, sending shares—which had already soared 50% in the six weeks before the announcement amidst rumors of a deal—up a further 18%.

SAC was not accused of wrongdoing in the case.

SAC is also facing a criminal probe by federal prosecutors in New York examining trades made in an account overseen by the fund's billionaire founder, Steven A. Cohen, according to court documents and people familiar with the matter.


In Depth

Bob Doll's Ten Market Predictions For 2016

Jan 7 2016 | 9:37pm ET

Well-known market strategist Robert Doll has published his annual list of ten predictions...

Lifestyle

Citadel's Ken Griffin Donates $40M To New York's Museum of Modern Art

Dec 22 2015 | 9:23pm ET

Citadel founder Ken Griffin has donated $40 million to New York’s Museum of Modern...

Guest Contributor

Hedge Fund Marketing - Making the Most of Your Salesperson

Jan 20 2016 | 8:11pm ET

In this contributed article, Bruce Frumerman of Frumerman & Nemeth takes a close...