Cohen Won’t Testify Before Grand Jury

Jul 1 2013 | 1:26am ET

SAC Capital Advisors ended its “unconditional” cooperation with an insider-trading investigation when federal prosecutors subpoenaed founder Steven Cohen and other executives, and Cohen has made good on the threat.

Cohen has declined to testify before a grand jury considering charges against the hedge fund, The New York Times reports. The billionaire’s lawyers have told prosecutors that Cohen would assert his Fifth Amendment right against self-incrimination if called; it is not clear whether Cohen appeared in person to do so.

Prosecutors are considering criminal charges against both SAC and Cohen himself. They face a deadline this month to file some of the most serious charges, but are considering a variety of legal strategies that could give them more time.

Cohen’s refusal to testify has not extended to the five other SAC executives who also received subpoenas. Those five have met with prosecutors in recent weeks, although it is unclear whether they did so rather than testify before the grand jury.

The five executives to cooperate were SAC President Tom Conheeney, chief operating officer Solomon Kumin, chief compliance officer Steven Kessler, trading chief Phillipp Villhauer and portfolio manager Anthony Vaccarino.

Neither Cohen nor SAC have been accused of any wrongdoing in a series of insider-trading cases that have produced charges, plea agreements or guilty verdicts against a number of current or former SAC executives. The most serious potential charges against the firm have to do with the allegedly illicit trading of former portfolio manager Mathew Martoma, who has pleaded not guilty.

Cohen has not spoken out about the cloud surrounding his firm, which has led to billions of dollars in redemptions, which will leave SAC with very little outside capital by the end of the year. But the Times reports that Cohen recently told a senior Wall Street executive, “I sleep at night and I didn’t do anything wrong, but that doesn’t mean they can’t ruin my business.”


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