Saturday, 24 September 2016
Last updated 22 hours ago
May 29 2014 | 12:21pm ET
Federal prosecutors are taking a wait-and-see approach with the Securities and Exchange Commission’s case against SAC Capital Advisors founder Steven Cohen.
Prosecutors yesterday asked the administrative law judge overseeing the case to keep in place a stay, delaying an eventual trial. They said the pending appeal of two hedge fund traders not affiliated with SAC could have an impact on the case, in which the SEC accuses Cohen of failing to supervise employees convicted of insider trading.
Level Global Investors co-founder Anthony Chiasson and former Diamondback Capital Management trader Todd Newman are seeking to have their insider-trading convictions thrown out, arguing that prosecutors should have been required to show that they knew that the sources of their allegedly confidential information received a benefit for divulging it. The U.S. Second Circuit Court of Appeals appeared sympathetic to that argument last month, and a finding in favor of Chiasson and Newman could affect the conviction of former SAC trader Michael Steinberg, one of the employees Cohen is accused of failing to supervise.
The lawsuit against Cohen, filed last year, was stayed pending the outcome of a criminal insider-trading case against SAC. That settlement, under which SAC has become a family office called Point72 Capital Management, was approved last month.
Prosecutors said they would update the judge, Brenda Murray, by Aug. 26. It is unclear when the appeals court will issue its decision in the Chiasson-Newman case, or whether Murray will grant the request.