Billionaire Cohen settles with SEC, could soon manage outside money

Fri Jan 8, 2016 4:51pm EST
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By Jonathan Stempel

(Reuters) - The hedge fund billionaire Steven A. Cohen has resolved U.S. charges related to insider trading, in an accord that clears the way for one of Wall Street's top investors to soon manage outside money even after his former firm pleaded guilty to fraud.

Cohen accepted a two-year ban on managing outside money in a settlement announced on Friday by the U.S. Securities and Exchange Commission, possibly ending the long probe by the government into Cohen and his former firm SAC Capital Advisors.

The accord is a victory for Cohen, 59, whose Stamford, Connecticut, firm, now called Point72 Asset Management, manages his roughly $11 billion fortune.

It allows Cohen to resume managing money for outside investors as soon as Jan. 1, 2018, without the overhang of a potential lifetime ban. No fine was imposed.

SAC, which once invested more than $14 billion, pleaded guilty to fraud in 2013 and paid $1.8 billion in criminal and civil settlements with U.S. authorities.

Cohen agreed at the time to stop managing outside money. He was not criminally charged.

In resolving a 2-1/2-year-old SEC administrative proceeding, Cohen did not admit or deny the regulator's findings that he failed to properly supervise former portfolio manager Mathew Martoma, who was convicted in February 2014 of insider trading.

Friday's settlement "achieves significant and immediate investor protection and deterrence, while ensuring that the activities of his funds are closely monitored going forward," Andrew Ceresney, head of the SEC enforcement division, said in a statement.   Continued...

Hedge fund manager Steven A. Cohen 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