Analysis: SAC's Cohen shows no signs of retreat despite scandal

Mon Dec 3, 2012 1:15am EST
 
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

By Svea Herbst-Bayliss, Katya Wachtel and Emily Flitter

NEW YORK - Hedge fund industry titan Steven A. Cohen appears to have made up his mind about one thing - he has no plans to do anything but run his $14 billion SAC Capital Advisors even as U.S. authorities are breathing down his neck.

Over the past week, Cohen, long envied on Wall Street for his years of double-digit returns, has absorbed a one-two punch as yet another of his former managers was arrested on insider trading charges and U.S. securities regulators warned they may file civil charges against his 20-year-old hedge fund firm.

For many managers, this kind of news would have been personally devastating and might have prompted a retreat.

But if anyone thought the 56-year-old billionaire might use the heightened regulatory scrutiny as reason to retire early and close up shop, they are mistaken.

That is the message Cohen conveyed to investors on a call last Wednesday. Employees of SAC heard from him a day later. These people said it is business as usual at Stamford, Connecticut-based SAC, where employees have grown accustomed to drawing scrutiny from federal authorities for several years now.

To date, federal authorities have charged or implicated seven former employees of SAC Capital with insider trading while working at the firm, but have not alleged any wrongdoing by Cohen himself.

PERSONALLY SIGNED OFF

The criminal and civil charges filed on November 20th against Mathew Martoma come closest to Cohen because authorities allege the SAC Capital owner personally signed off on the trades by Martoma that generated profits and avoided losses totaling $276 million.   Continued...

 
Hedge fund manager Steven A. Cohen, founder and chairman of SAC Capital Advisors, responds to a question during a one-on-one interview session at the SkyBridge Alternatives (SALT) Conference in Las Vegas, Nevada May 11, 2011. REUTERS/Steve Marcus