Wednesday, 23 July 2014
Last updated 11 hours ago
Jul 25 2013 | 10:35am ET
SAC Capital Advisors has been charged with insider-trading, and appears poised to fight the allegations. But the legendary hedge fund may not survive to see its day in court.
While SAC proclaims its innocence and prepares its defense, its banks and counterparties are mulling the future of their relationship with the firm. Though SAC has little to fear from investor withdrawals—most outside clients have already filed to redeem their money—it cannot do business without the banks that provide it with trading, lending and prime-brokerage services.
Those banks, including Goldman Sachs and Deutsche Bank, are considering the feasibility of continuing to do business with a hedge fund under criminal indictment, Bloomberg News reports. And while SAC told clients yesterday that it would continue to operate normally, the loss of trading and servicing relationships would make that impossible.
SAC is a client of a host of major banks in addition to Goldman and Deutsche Bank. It is a major trading client of Morgan Stanley. In addition, it employs all three banks, as well as Barclays, Credit Suisse Group and JPMorgan Chase as prime brokers.
Prosecutors are seeking all of SAC's remaining assets in their case against the firm, while the Securities and Exchange Commission is seeking to bar firm founder Steven Cohen from trading.
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…