Investor To Redeem $100M From Embattled SAC

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.

In Depth

Related-Company Fees: Normal Industry Practice or Conflicted Compensation?

Nov 11 2015 | 4:23pm ET

Regulatory agencies as well as investors are increasingly exploring whether certain...


Ferrari Roars in Wall Street Debut

Oct 21 2015 | 4:28pm ET

Shares of supercar maker Ferrari jumped as much as 15 percent to a high of nearly...

Guest Contributor

Private Debt - What is the Opportunity?

Nov 11 2015 | 3:28pm ET

In this contributed article, Rob Allard, founding partner of Firebreak Capital...


Editor's Note

    Oct 21 2015 | 10:41am ET

    One of the most unique charity benefits in the hedge fund industry, A Leg To Stand On's (ALTSO's) Hedge Fund Rocktoberfest - NYC, raised nearly $500,000 last Thursday thanks to the generous support of major sponsors and nearly 1,400 attendees from the Tri-State finance, business and hedge fund communities. Read more…