Steven Cohen throws a party despite his fund's indictment
By Matthew Goldstein
(Reuters) - Hedge fund billionaire Steven A. Cohen did not let the filing of criminal charges against his $14 billion SAC Capital Advisors get in the way of a party this weekend at his vacation estate in tony East Hampton, New York.
The Saturday night party at Cohen's 10-bedroom home on Further Lane took place two days after federal prosecutors in New York announced a five-count criminal indictment against SAC Capital that portrayed the 21-year-old Stamford, Conn.-based fund as a breeding ground for unlawful insider trading.
The lavish affair, which one source said included delivery of $2,000 worth of tuna from a local fish store to Cohen's home, was planned before the charges were filed. A person familiar with the event said the party, attended by a few dozen people, was intended by the 57-year-old manager to show support for ovarian cancer research, though it was not a fundraiser.
On Friday, lawyers for SAC Capital entered a not guilty plea to the charges. Some in the hedge fund industry said a fierce determination to carry on business as usual was behind Cohen's decision to go ahead with the bash at his 9,000-square-foot home on a street famed for its waterfront mansions.
Cohen, whose estimated fortune is $9 billion, set up shop in 1992 with just $25 million and earned a reputation as of the greatest stock traders of his generation. His firm has posted a 25 percent average annual return, one of the best performance track records in the $2.4 trillion hedge fund industry, despite charging investors some of the highest fees.
SAC Capital, after the indictment was announced, sent an email to employees and investors saying the firm would operate as normal. It stressed that prosecutors did not intend to take any action that would imperil the firm's ability to return some $4 billion in outside investor money by year's end.
RARE MOVE RAISES QUESTIONS
It's a rare move for federal prosecutors to indict a corporation, and it remains to be seen just how long Wall Street banks that lend money to SAC Capital and trade with it, will continue to do. Continued...