New York (HedgeCo.Net) – San Francisco-based fund of hedge funds Ironwood Capital Management is planning to pull about $100 million from hedge fund billionaire Steven Cohen’s SAC Capital Advisors, according to a Reuters report.
Since the SEC insider trading investigation into his $15 billion hedge fund started, nine traders current or former SAC employees have been linked to insider trading while working at SAC Capital, four of whom pleaded guilty.
“Ironwood decided to withdraw client money from Cohen’s fund after SAC told investors earlier in May it was no longer cooperating “unconditionally” with the government in its investigation and might not be able to give investors frequent updates on the probe.”
Private-equity giant Blackstone Group, the hedge fund’s largest outside investor, has made preparation to withdraw $200 million to $300 million from SAC, The Wall Street Journal reported. Blackstone had about $550 million invested in SAC as of March, the paper said.
In a letter to investors in April Steven Cohen put up a strong front against the onslaught of investigations, and instituted multiple reforms to their compliance team and procedures. “Our reforms are no panacea,” Steven Cohen said, “it is not possible to stop someone intent on breaking the law – but these reforms send an unmistakable message: we have zero tolerance for wrongdoing and if you are caught breaking the rules, it will cost you.”
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