SAC lawyers met prosecutors to argue against charges

Thu May 23, 2013 5:14pm EDT
 
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By Emily Flitter and Matthew Goldstein

NEW YORK (Reuters) - Steven A. Cohen's lawyers made their best case argument a month ago to federal prosecutors about why the hedge fund billionaire and his SAC Capital Advisors should not be charged with criminal wrongdoing in a long-running insider trading investigation.

But people familiar with the late April meeting said the lengthy presentation did not impress federal prosecutors, who are now considering whether to use a law aimed at prosecuting the Mafia and drug gangs to pursue a criminal case against Cohen's $15 billion hedge fund.

Cohen's lawyers had asked for the meeting with federal prosecutors after agreeing in March to pay $616 million to U.S. securities regulators to settle allegations the firm's employees had used inside information to make trades in four stocks. The sources said Cohen's lawyers wanted to meet with prosecutors to bring to a conclusion a criminal investigation that has dogged his hedge fund for nearly seven years.

Cohen has not been charged with wrongdoing.

Lawyers for the 21-year-old hedge fund made an "aggressive presentation," according to the sources, reviewing the government's investigation in detail to support their claim that the government did not have enough evidence to charge Cohen with either insider trading or any other securities law violation.

A lawyer for SAC Capital did not respond to a request for comment. Representatives of the FBI declined to comment.

In the meeting, Cohen's legal team, led by Martin Klotz of Willkie Farr & Gallagher, spent several hours with top prosecutors for Manhattan U.S. Attorney Preet Bharara, including Deputy U.S. Attorney Richard Zabel and Lorin Reisner, chief of the criminal division.

A representative from the FBI also attended the meeting, the sources said on condition of anonymity.   Continued...

 
An exterior view of the headquarters of SAC Capital Advisors, L.P. in Stamford, Connecticut, in this picture taken December 13, 2010. REUTERS/Mike Segar