|With his payoff to the SEC, billionaire crook Steven Cohen gets to avoid |
jail and can get back in "business" after just two years. (Screen capture
from YouTube video)
In Insider Trading Settlement, Steven Cohen Will Be Free to Manage Outside Money in 2 Years
Steven A. Cohen, the billionaire investor, is walking away largely unscathed from nearly a decade of investigations by federal prosecutors and securities regulators into accusations of insider trading at his former hedge fund.
On Friday, Mr. Cohen reached a deal with the Securities and Exchange Commission that will bar him from managing money for outside investors for the next two years. That is a far cry from the lifetime ban that securities regulators sought when they filed an administrative case against him more than two years ago.
Lifetime bans from the industry are rare. Nonetheless, the case against Mr. Cohen — accusing him of failing to adequately oversee an employee — was among the most prominent administrative actions brought by securities regulators in recent years. And he is not paying a fine in the settlement.
“It’s a huge victory for him not to get fined personally,” said Ross B. Intelisano, a securities lawyer at the law firm Rich, Intelisano & Katz. “In a ‘failure to supervise’ case, the S.E.C. is usually pretty aggressive in getting fines, so it seems like a hollow victory.”
The settlement clears the way for Mr. Cohen, who is 59, to return to the hedge fund business, where his ability to mint money trading stocks has been envied for decades. One of the richest men on Wall Street, Mr. Cohen is also an active art collector known for buying pieces by Damien Hirst and Steve Koons.
“Resolving the case gives us certainty and opens the path to raising outside capital,” Mr. Cohen wrote in a memo on Friday to his employees, which was reviewed by The New York Times.
The road back has come at a cost, however.
During the years when his former firm, SAC Capital Advisors, was under investigation by prosecutors, some top traders left and legal costs mounted. Mr. Cohen’s reputation, on Wall Street and more widely, was tarnished as some questioned how he had outperformed the industry for so many years.
In 2013, SAC Capital pleaded guilty to insider trading charges and paid a record $1.8 billion penalty. In pleading guilty, the hedge fund had to return outside money to investors.
Since then, Mr. Cohen has been managing largely his own $11 billion fortune. And his new “family office” firm in Stamford, Conn., Point72 Asset Management, has been on a tear.