New York (HedgeCo.Net) – The SEC has finally found a way to go after Steven Cohen, the new case alleges that Cohen received highly suspicious information that any reasonable hedge fund manager would investigate, yet he did not.
The SEC says; “Instead of scrutinizing their (traders) conduct, Cohen praised a trader for his role in the suspicious trading and rewarded another with a $9 million bonus for his work. Cohen’s hedge funds earned profits and avoided losses of more than $275 million as a result of the illegal trades.”
“Hedge fund managers are responsible for exercising appropriate supervision over their employees to ensure that their firms comply with the securities laws,” said Andrew J. Ceresney, Co-Director of the SEC’s Division of Enforcement. ”After learning about red flags indicating potential insider trading by his employees, Steven Cohen allegedly failed to follow up to prevent violations of the law. In addition to the more than $615 million his firm has already agreed to pay for the alleged insider trading, the Enforcement Division is seeking to bar Cohen from overseeing investor funds.”
In connection with these cases, CR Intrinsic, an affiliate of Cohen’s firm S.A.C. Capital Advisors, agreed to pay more than $600 million in the largest-ever US insider trading settlement. Another Cohen affiliate, Sigma Capital, agreed to pay nearly $14 million to settle insider trading charges.
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