March 17, 2016 / 11:45 PM / in 2 years

Steve Cohen’s Point72 says it has perfect U.S. compliance

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

NEW YORK (Reuters) - Billionaire Steve Cohen’s investment firm, a family office that took over managing his fortune in 2014 after his hedge fund pleaded guilty to securities fraud, has a perfect regulatory compliance record, its president said on Thursday.

Point72 Asset Management, which manages about $11 billion and took over after regulators barred Cohen’s SAC Capital Advisors from dealing with the public, has had “zero point zero” compliance and regulatory problems, Point72 President Doug Haynes said in an interview.

The firm succeeded SAC Capital Advisors, Cohen’s hedge fund firm which pleaded guilty to securities fraud in an insider-trading settlement with U.S. regulators that also included a $1.8 billion fine. 

In an interview with Reuters at Point72’s Stamford, Connecticut headquarters, Haynes said the firm’s compliance culture goes beyond strict legal parameters.

“We have professional standards, and you get fired if you violate them,” he said.

Haynes, a veteran of consulting firm McKinsey & Co., said compliance staff has increased 25 percent since Chief Compliance and Surveillance Officer Vincent Tortorella was hired in April 2014.

He said Tortorella, a former federal prosecutor, has changed the way Point72 does surveillance of its investment professionals. The compliance staff includes former personnel from the Central Intelligence Agency, Federal Bureau of Investigation and Securities and Exchange Commission.

It employs technology from the likes of Palantir, a data analysis-focused company used by government agencies and others.

Even so, Point72’s trading still draws attention.     

This week, influential financial blog ZeroHedge asked in a post if Cohen was “back to his criminal ways,” suggesting Point72 might have had traded on inside information.

The question came after Celator Pharmaceuticals CPXX.O shares appreciated Tuesday and Wednesday roughly 458 percent. The surge stemmed from news of Celator’s successful test of its new leukemia treatment VYXEOS, which was released on Monday after the market close.

In a filing on Tuesday after the market close, Point72 revealed an 8.3 percent stake in Celator, or over 2.8 million shares.

ZeroHedge asked: “Why did SAC go long Celator Pharmaceuticals in the days immediately preceding the company’s March 14 favorable Phase 3 trial result of Vyxeos for Acute Myeloid Leukemia? What was the investment thesis/catalyst for this decision.”

A spokesman at Point72 said: “The ZeroHedge post is ... false, wrong and absolutely inaccurate.

“Point72 did not purchase any Celator shares before the company made its March 14th announcement,“ the spokesman added. ”Point72 only purchased Celator shares after the March 14 announcement.”

Reporting by Jennifer Ablan and Lawrence Delevingne; Editing by Cynthia Osterman

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