SEC seeking to ban SAC's Cohen from financial industry

Fri Jul 19, 2013 5:55pm EDT
 
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By Emily Flitter

NEW YORK (Reuters) - U.S. securities regulators took their boldest step yet in a long-running insider trading probe against Steven A. Cohen, declaring Friday they would try to bar the hedge fund mogul from managing other people's money.

Legal experts said the charges represented a strategic calculation by the SEC that some action had to be taken, but that the agency could end up struggling to prove its case.

The Securities and Exchange Commission charged Cohen, 57, with failing to supervise former SAC Capital Advisors portfolio manager Mathew Martoma and SAC executive Michael Steinberg, both of whom face criminal and civil insider trading charges.

The civil administrative proceeding is the most serious challenge yet to Cohen and his standing in the industry he helped build and which made him billions.

Several lawyers said that unlike federal prosecutors who have additional time to file criminal charges against Cohen, the SEC is bumping up against a five-year statute of limitations to bring civil charges stemming from its investigation.

"It would appear the commission, rather than doing nothing, feels it has to do something. This constitutes something," said C. Evan Stewart, a partner at Zuckerman Spaeder in New York who is not involved in the case.

A spokesman for SAC Capital said the SEC's administrative proceeding had no merit.

"Steve Cohen acted appropriately at all times and will fight this charge vigorously," said SAC's Jonathan Gasthalter.   Continued...

 
Hedge fund manager Steven A. Cohen, founder and chairman of SAC Capital Advisors, listens 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