Monday, 26 September 2016
Last updated 2 days ago
Oct 23 2013 | 1:14pm ET
SAC Capital Advisors' retrenchment has continued with the culling of six trading teams in the U.S.
In an internal memo, firm president Tom Conheeney said that SAC had parted way with the six teams and confirmed that it would close its London office, which employs more than 50 people. Conheeney also acknowledged for the first time that the criminal insider-trading charges against the firm would lead to a marked change in the way SAC operates, contradicting earlier claims that the firm would continue as normal.
SAC is currently in talks with prosecutors to settle those charges. The firm could have to pay some $1.4 billion and is likely to be barred from trading outside capital for a period. Investors have filed redemptions for substantially all of that capital, anyway, and SAC will have only about $8 billion in internal capital left by the end of the year.
"As our negotiations with the government have unfolded, it has become clear to us that the outcome the government is demanding is likely to have a greater than first anticipated impact on the firm," Conheeney wrote. "We have concluded that we must operate as a simpler firm and reduce our capital allocations. This was not something we had been contemplating."
Conheeney said that the firm, which has increased bonuses several times to hold on to talent, did not expect to cut any more jobs this year.
"You have done a great job this year under extraordinarily trying circumstances," Cohneeney told the troops. "I don't know another group of professionals who could have done as well as you have under the conditions we have endured during the past two years."
Conheeney and SAC chief operating officer Solomon Kumin were in London yesterday to break the news.