The Seven Former SAC Employees Who Defied SEC Laws This Year

Discussion in 'Media' started by hvactec, Jul 20, 2011.

  1. hvactec

    hvactec VIP Member

    Jan 17, 2010
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    New Jersey
    All things considered, SAC Capital Advisors' Steve Cohen is having a pretty good year so far.

    His flagship fund is up about 10 percent, and this is after his 1 percent management fee and astounding 50 percent performance fee.

    Assets under management continue to flow into the firm and were at $14 billion at the end of 2010, according to Institutional Investor's Hedge Fund 100 ranking.

    This post originally appeared on Instituional Investor

    However, 2011 is also proving to be something of a regulatory embarrassment for the multi-billionaire who grew up in Great Neck, New York, one of the most affluent communities on Long Island, the son of a dress manufacturer father and a piano teacher mother.

    While neither Cohen, 55, nor his firm have been accused of any wrong-doing, at least seven former employees have fallen foul of federal regulators this year alone. Two of them pled guilty to criminal charges, in part for actions that took place while they worked at SAC, while the others settled civil claims made by the Securities and Exchange Commission.

    Meanwhile, Senator Chuck Grassley of Iowa is investigating how the SEC handled referrals from the Financial Industry Regulatory Authority (FINRA) regarding suspicious trades by the Cohen's firm. In a press release, Grassley’s office says it is interested in whether the SEC is properly policing and regulating the financial markets on behalf of pension holders with investments in securities and other investors.

    Let’s be clear. No one is accusing SAC founder Steve Cohen of any wrongdoing. And there is no evidence that Cohen was involved in any illegal activity.

    Even so, one of the most overriding questions is whether the targeted ex-SAC traders learned to skirt the rules from their experience at SAC, or whether they were generally the rules-breaking types who were kept in line by SAC’s compliance and oversight.

    We don’t pretend to know the answer.

    More than likely, they were motivated by a higher calling that has so permeated Wall Street that the average and above-average person who works there does not even realize it—greed.

    Read more: Institutional Investor Global finance market news, analysis and research

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