Friday, 24 March 2017
Last updated 10 min ago
Jun 26 2013 | 12:21pm ET
Having trouble making conventional insider-trading charges stick against SAC Capital Advisors or founder Steven Cohen, federal prosecutors may seek to allege that Cohen was willfully blind to the allegedly illegal activities of his subordinates.
While prosecutors haven't abandoned other legal avenues against SAC or Cohen, they are investigating the conscious avoidance theory. Under such an allegation, the government would accuse Cohen of deliberately avoiding knowledge of potential illegal activities at his firm.
Prosecutors are said to believe that such a tack against SAC could prove fruitful, given the firm's structure, The Wall Street Journal reported. At SAC, trade ideas are generated by the firm's teams, and the best are filtered up to Cohen and the firm's other top managers.