Cohen's SAC Capital indicted in insider case
The hedge fund operated by embattled billionaire Steven A. Cohen made hundreds of millions of dollars illegally and allowed unprecedented and pervasive insider trading to go unchecked for years, federal prosecutors said in an indictment unsealed Thursday.
SAC Capital Advisors was charged with wire fraud and four counts of securities fraud. Prosecutors alleged the crimes were carried out from 1999 through at least 2010.
Cohen himself wasn't named as a defendant in the criminal case, but the charges could topple his Stamford, Conn., firm, which once managed $15 billion in assets. In papers filed in federal court in Manhattan, the government sought SAC's forfeiture of "any and all" assets.
U.S. Attorney Preet Bharara said at a news conference that SAC "trafficked in inside information on a scale without any known precedent in the history of hedge funds." He added that the firm had "zero tolerance for low returns, but seemingly tremendous tolerance for questionable conduct." Still, he said shutting the company was not his goal.
The charges came less than a week after federal regulators accused Cohen in a related civil case of failing to prevent insider trading at the firm.
In a statement, SAC Capital said it "has never encouraged, promoted or tolerated insider trading and takes its compliance and management obligations seriously." It added: "The handful of men who admit they broke the law does not reflect the honesty, integrity and character of the thousands of men and women who have worked at SAC over the past 21 years. SAC will continue to operate as we work through these matters."
A lawyer for Cohen did not immediately respond to a message seeking comment Thursday.
Cohen, 57, a Great Neck native who attended Great Neck North High School, faces possible fines and could be barred from managing investor funds. He now lives in Greenwich, Conn.