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Alternative Market Briefing

Update: SAC investors face clawbacks from SEC

Monday, July 29, 2013

Precy Dumlao, Opalesque Asia:

The trouble hounding beleaguered hedge fund manager Steven Cohen and his $15bn SAC Capital Advisors is seen to trickle down to his investors as the Securities and Exchange Commission is expected to pursue his assets through clawback.

According to a commentary published by Tavakoli Structured Finance, if government prosecutors can prove Cohen is guilty of insider trading, then the next move of the SEC is to clawback illegal profits obtained from the illegal transaction.

"If investors accessed SAC through a fund of funds or a multi-advisor fund, they (SEC) will likely sue the managers of those funds," the commentary said. But the biggest loser will still be Cohen as he owns nearly 60% of SAC’s assets as all of the funds will be up for grabs by the SEC because of the insider trading case.

Last week, various media reported that Federal prosecutors indicted Cohen on a criminal charge of insider trading, in a rare move against a large company that could threaten its survival. The authorities, who described Cohen as a "magnet for cheating," argued that the firm and its units permitted a "systematic" insider trading scheme to unfold from 1999 to 2010, activity that generated hundreds of millio......................

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