Tuesday, 22 July 2014
Last updated 4 hours ago
Jan 8 2013 | 1:35pm ET
Publicly, SAC Capital Advisors has been fairly sanguine about the possibility of large redemptions as it fights an insider-trading scandal. But the firm may be more worried than it is letting on.
The $14 billion hedge fund is "scrambling to prevent massive redemptions," according to Fox Business Network. SAC is reportedly holding one-on-one meetings with large investors in an effort to reassure them.
The hedge fund is expressing confidence that neither it nor founder Steven Cohen will face criminal charges, FBN reports. Instead, SAC expects to be hit with a large fine.
SAC investors have until Feb. 15 to submit redemption notices. Some large investors have already made their decisions; Titan Advisors said it would redeem its SAC investments, but the Blackstone Group, which has $550 million with the hedge fund, is sticking with it. A large proportion of SAC's assets belong to Cohen or other employees, insulating the firm from the sort of withdrawals that could imperil its existence.
While SAC has been suspected of insider-trading for years and has seen several former employees plead guilty to the crime, the firm itself has never been charged. That is likely to change: The Securities and Exchange Commission warned the firm last year that it is preparing a civil enforcement action against it; reports indicate that Cohen himself could be named. In addition, former portfolio manager Mathew Martoma has been charged with insider trading in the first case to refer specifically, if obliquely, to Cohen himself. Martoma, who has pleaded not guilty, has refused authorities' efforts to win his cooperation in building a case against Cohen.
SAC has said it is confident that neither it nor Cohen has done anything wrong.
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…