SAC Faces the Music: Preet Bharara Goes Nuclear on Hedge Fund—Is Cohen Next?

Observer – Last Thursday, when the government charged SAC Capital with perpetrating an insider-trading scheme from 1999 through 2010, the move answered a lot of questions people had been asking of late. The main one: given the fact that the Feds had yet to charge SAC’s founder, Steven Cohen, with any crimes, was he going to get off scot-free while an ever-growing number of his henchmen were charged with—and convicted for—crimes committed under his watch? Was it the same old story, in which another of Wall Street’s powerful avoids punishment for something he quite likely encouraged and most definitely profited from? The refreshing answer: not this time. The U.S. attorney for the Southern District, Preet Bharara, plays hardball, and he just threw a fastball right at Mr. Cohen’s chin.

Of course, the answer comes with a couple of caveats. For one, Mr. Cohen has not been personally charged with a crime. So he’s not facing jail time, at least not yet. What’s more, the firm has only been charged; there’s no guarantee it will be convicted. And don’t ask me if SAC (or Mr. Cohen) is guilty. I’m no judge and jury, after all, and I’m also wary of being sued. (For good reason. Conrad Black sued me in 2011 for calling him a thief when he’s only a fraud in the eyes of the law.) But one thing is clear, and it is this: Mr. Bharara is aiming to destroy SAC Capital and, by extension, Mr. Cohen himself.

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