SEC Fines SAC’s Steve Cohen Millions but is Afraid to Say his Name

SAC Capital run by Greenwich hedge fund manager Stevie Cohen agreed to settle insider trading violations with the Securities and Exchange Commission yesterday for $614 million. The regulator amended its complaint from November 2012 when it sued a SAC trader Matthew Martoma for making triple digit millions off inside info on two drug stocks. Martoma who worked at a division of SAC Capital called CR Intrinsic was as arrested by the Justice Dept and faces years in jail. I talked about the new information in the SEC complaint with RT’s most popular TV host Max Keiser yesterday on a radio program. It’s a short fun 3 minute listen that you see here.

What I found most appalling about this settlement is the SEC lays out dates, times, and conversations that Stevie Cohen has with his employee about the inside information and then he trades on it to avoid millions in losses. Except the SEC won’t even directly name him in the lawsuit. Yep- they just call him portfolio manager A and add in one line at the beginning of the complaint that portfolio manager A is the founder and owner of SAC Capital. Who we all know is Steve Cohen of Greenwich, Conn.

Stevie laughing with wife Alex at the SEC

Stevie laughing with wife Alex at the SEC

The settlement has a ton of penalty fees in it and the SEC is flying their press flag touting it’s their largest insider trading settlement ever. But what kind of impact does this have on other participants in the market if they think you can just pay your way out of insider trading. Unlike Diamondback and Level Global, funds seeded by Stevie Cohen, who had to shut down from the stain of guilty inside traders at their firms; SAC Capital is business as usual. Cohen didn’t loose his securities license and he can afford the fine considering is net worth is now up to $9-10bn. His firm also doesn’t admit any GUILT.

It’s one of the biggest slaps in main street’s face because it shows if you’re the world’s most famous trader, and have enough money, you can just pay the government to allow you to inside trade.

Now the Justice Department has a bulls eye on Stevie Cohen and has tried to build a case to arrest him since 2006 and could still make an arrest. I mean the SEC’s case only flat out tells them how Stevie did the inside trade. But with the statute of limitations in these cases they only have till June this year to make a charge. Right now it’s looking like Stevie just bought himself a get-out-of-jail pass and he’ll be collecting more millions as he rounds GO.


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  1. Peter Jennings says

    Perhaps Voldemort would have been better than portfolio manager A?
    What does the US admin really think investors will do when they realise that their funds managers are just another set of crooks & fraudsters?
    God help the honest folk who work in these firms and have to compete with vindictive sycophants who have no scruples or respect for anything or anyone. It’s sowing the seeds of disaster.

  2. Unbelievable! Good for you for keeping tabs on him…someone has to do it.

  3. Anon Cust says

    If the US DOJ and SEC do not charge this now open and shut Cohen case by June 2013, they will be announcing to the world again there is no American Justice anymore, American bureaucrats are criminals after the fact, and American bureaucrats commonly accept fines (bribes) to make the crimes go away.

    No wonder Superman left!

  4. LOL! I shouldn’t really find it funny, but Max is VERY good at sarcastically explaining the vast corruption that will eventually marginalize every lower-class and middle-class American.

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