New York (HedgeCo.Net) – We have reported the ongoing trouble that SAC’s Steven Cohen with Insider Trading allegations against traders at his firm SAC Capital.
In January, 2011 after the first slate of investigations, Steven Cohen consoled his investors with the fact that “While this investigation plays out, I and the other portfolio managers remain focused on managing the assets entrusted to us. We are confident that our ability – and my ability – to do so will not be affected,”
Since the investigation started nine traders current or former SAC employees have been linked to insider trading while working at SAC Capital, four of whom pleaded guilty.
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”
However, these changes and a $616 million fine, have not satisfied the investigators.
Bloomberg has now reported that Steven Cohen is considering an agreement where SAC Capital Advisors LP would close the firm and admit wrongdoing. The hedge fund would not be prosecuted unless it broke the law again.
This deal comes as a July deadline approaches when the 5-year statute of limitations will expire for the U.S. Attorney charge Cohen with illegally selling shares based on insider information.
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