Monday, 2 March 2015
Last updated 5 hours ago
May 29 2013 | 12:05pm ET
Another large investor is pulling its money from SAC Capital Advisors as the hedge fund braces for possible criminal insider-trading charges.
Ironwood Capital Management plans to redeem its $100 million investment in the hedge fund, joining the Blackstone Group, which plans to pull most—if not all—of the $550 million it invests in SAC. The San Francisco-based firm elected to quit the $15 billion hedge fund after SAC said earlier this month it was no longer cooperating unconditionally with the federal investigation into its practices.
SAC—which suffered $1.7 billion in redemptions in February—is bracing for another wave of withdrawal requests on June 3. The firm has sought to ease redemption terms, allowing investors who do not pull their money next month to still fully redeem by the end of the year, but has faced a wave of bad publicity in recent weeks, most notably word that federal prosecutors are mulling criminal charges and that six SAC executives, including founder Steven Cohen, have been subpoenaed to appear before a grand jury.
Cohen is also said to be planning to transform SAC into a family office managing only his own fortune as part of an offer to prosecutors to avoid charges.
SAC believed it had settled its most serious legal issues in March when it agreed to pay $616 million to end two Securities and Exchange Commission probes. But the firm, which has denied any wrongdoing, was disabused of that notion about a month ago at a meeting between the hedge fund's lawyers and prosecutors.
The government faces a July deadline to file criminal fraud charges against SAC or Cohen. But prosecutors are considering racketeering charges against the hedge fund, which would give them another five years to bring claims.
Jan 23 2015 | 1:00pm ET
In our new section, FINtech Focus, we will profile one of these firms each week. While fintech is a broad category, we will be focusing on firms that specifically cater to the alternative investment industry. Read more…