Fri, Sep 19, 2014
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

SAC’s Cohen under probe by SEC, Senate

Thursday, May 26, 2011

Steve Cohen
Opalesque Industry Update: Two weeks after federal prosecutors succeeding in securing a guilty verdict against Galleon Group founder Raj Rajaratnam for insider trading, it has been reported that the Securities and Exchange Commission along with Congressional investigators, are looking into the trading record of SAC Capital, one of the largest hedge funds in the world based in Stamford, Conn., founded by Steve Cohen.

On Tuesday, Republican Sen. Chuck Grassley from Iowa, sent a letter to SEC chairwoman Mary Schapiro demanding an explanation of how the agency is dealing with alleged suspicious trading activities related to Cohen’s $13bn hedge fund.

Grassley wants to meet with SEC officials this Friday, in addition to requesting a written explanation of the agency’s probe into SAC’s alleged questionable activities. The senator gave SEC officials until June 7 to submit the written explanation, which specifically demands how the SEC “resolved: tips to some 20 trades conducted by SAC dating as far back as 2000.

Last week, a spokesman for Grassley confirmed that the senator would conduct an investigation into SAC’s suspicious trading “on about 20 instances.”

To begin his probe, Grassley has requested some key information from the Financial Industry Regulatory Authority (FINRA), an independent regulator of brokerage firms, on certain trades relating to SAC.

On Monday, SAC Capital issued a statement claiming they met with investigators and that they are cooperating with the probe.

“We welcomed the opportunity to meet with the staff to educate them about the firm and our compliance efforts, and had an entirely appropriate, professional and cordial meeting. We will continue to cooperate in any way we can,” the company said in the statement. Grassley wants to know if the SEC has issued a "Wells Notice" (a letter from a regulator informing a company that enforcement action has commenced), to SAC Capital concerning reports that company has received a high number of referrals compared to other companies.

The Senator wrote in his letter to Schapiro, “The function of Congressional investigations is not to establish whether any private firms have violated the law, but rather to examine particular facts and circumstances in order to assess how well the agencies created by Congress are executing the authorities granted to them. Looking into specific examples is essential for Congress to understand how effectively the S.E.C. pursues referrals such as these.”

The senator has been a constant critic of the SEC and is questioning the agency’s vigilance towards protecting investors. Grassley also criticized the SEC for failing to discover the massive Bernard Madoff Ponzi scheme despite signs.

Grassley now wants the investigation against SAC capital expanded .

A spokesperson from Grassley’s office refused to divulge more information on the expanded investigation. The spokesperson told Gamut News, “(We) can’t offer any specifics of the information received from Finra on SAC, at the request of the investigative agencies involved.”
- Precy Dumlao

What do you think?

   Use "anonymous" as my name    |   Alert me via email on new comments   |   
Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing


  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. SEC charges 19 investment firms and one trader for breach of Rule 105[more]

    Benedicte Gravrand, Opalesque Geneva: The Securities and Exchange Commission (SEC) started a push to enhance the enforcement of Rule 105 of Regulation M last year to uncover hedge funds and private equity firms that have illegally participated in an offering of a stock after short selling it duri

  2. Fund managers, bullish on Europe, anticipate monetary policy separation of Fed and ECB[more]

    Komfie Manalo, Opalesque Asia: At least 202 fund managers with $556bn of assets under management said that while the European Central Bank (ECB) has eased its monetary policy that sent sentiments towards Europe to pick up, the Fed is expected to hike its rate in the spring of 2015. Investor

  3. News Briefs - Limited partners of investment managers may be subject to self-employment taxes, Just one week left until NYC's Rocktoberfest[more]

    Limited partners of investment managers may be subject to self-employment taxes On September 5, 2014, the Internal Revenue Service (“IRS”) issued Chief Counsel Advice 201436049, concluding that members of an investment manager were subject to self-employment taxes with respect to their e

  4. Institutions - Adviser's faith in hedge funds unshaken by CalPERS' move Advisers weigh in on CalPERS’ decision, Gina Raimondo sees no reason to follow California’s lead, exit hedge funds, Danish pension funds step up 'alternative investments'[more]

    Adviser's faith in hedge funds unshaken by CalPERS' move From WSJ.com: Financial advisers who use hedge funds in their clients' portfolios say they aren't rethinking that approach after a huge California pension fund announced plans to exit the hedge-fund market. The decision by the Cali

  5. Short Selling - Notorious U.S. short-seller targets Alibaba[more]

    From Wantchinatimes.com: A notorious American short-seller appears to have "targeted" Chinese internet giant Alibaba on the eve of its historic public listing on the New York Stock Exchange, reports Chinese web portal Hexun. Alibaba's highly-anticipated listing on Friday could potentially be the big