SAC 'Tense,' Cohen 'Intimidating' As Probe Continues

Dec 19 2012 | 11:31am ET

SAC Capital Advisors has said publicly and privately that it is confident that founder Steven Cohen has done nothing wrong. But as insider-trading investigators continue to circle the firm, things have gotten tighter since a former portfolio manager was arrested and the firm was warned a fraud lawsuit was likely.

Bloomberg News reports that the atmosphere at the Stamford, Conn.-based firm's offices is even more tense than usual. Cohen himself is described as even more intimidating than usual.

Such reports come even as Cohen and other top SAC executives have moved to boost morale and to reassure its employees. They have been telling traders and analysts that Cohen is confident he's done nothing wrong, even as it becomes increasingly obvious that the government is gunning for him.

Cohen for the first time was named—if not by name—in the cases against former portfolio manager Mathew Martoma, who was arrested and charged last month, accused of earning SAC $276 million trading on confidential information about Alzheimer's disease drug tests. In the criminal case against Martoma, Cohen is referred to as "Portfolio Manager A," and in the Securities and Exchange Commission's lawsuit as the "owner" of the hedge fund Martoma worked at. Both say that Cohen authorized Martoma's trades, though neither indicate that he knew Martoma was trading on allegedly inside information.

SAC itself was hit with a Wells notice, indicating that civil insider-trading charges against it are likely. Cohen is not named in that notice. But the SEC is reportedly considering charging him as well, for fraud and control-person claims.


In Depth

GSAM's Papagiannis: Liquid Alternatives For The Long Run

Apr 21 2017 | 8:44pm ET

Interest in liquid alternatives cooled a bit last year amid a broad shift in investor...

Lifestyle

Aston Martin Returns To Debt Market As DB11 Drives Turnaround

Mar 31 2017 | 5:21pm ET

James Bond’s preferred carmaker is returning to the public debt markets for the...

Guest Contributor

Debunking Conventional Investment Wisdom (Part II)

Apr 17 2017 | 5:56pm ET

The alternative investment industry is currently replete with buzzwords around data...

 

From the current issue of