Judge Lifts Two-year Old Stay in SEC Civil Case Against Steven Cohen

Dec 3 2015 | 12:12am ET

The SEC’s civil case against billionaire Steve Cohen will proceed following the lifting of a stay on Monday in place while prosecutors pursued criminal insider trading charges against employees at SAC Capital.

The regulator alleges that Cohen failed to adequately supervise two former SAC traders, Mathew Martoma and Michael Steinberg. The criminal conviction against Steinberg was famously tossed out in October following a series of court decisions that significantly raised the standard necessary to prove insider trading, although Martoma’s was unaffected. All told, U.S. Attorney Preet Bharara dropped charges against seven men, including Steinberg, due to the reversals.

The stay, which was lifted by SEC Chief Administrative Law Judge Brenda Murray, had been in place since August 2013. It was formally rescinded after the Justice Department withdrew its request to suspend the case.

The judge set a pretrial hearing conference for December 21. 

While the allegations related to Steinberg will likely be dropped to reflect subsequent developments, those relating to Cohen’s supervision of Martoma will likely remain.

A spokesperson for Cohen, who was never criminally charged, has previously stated the SEC’s civil case has no merit.

SAC Capital agreed to a plea deal in 2013 in which it paid $1.8 billion in penalties, stopped managing outside money and was renamed to Point72 Asset Management. 

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