Wed, Jul 8, 2015
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. Opalesque Exclusive: New systematic strategy managed alongside research firm outperforms S&P500[more]

    Benedicte Gravrand, Opalesque Geneva for New Managers: An emerging CTA manager explains how he runs his strategy, which is based on an index produced by a research firm. Peter Turk is head of

  2. Opalesque Exclusive: New systematic strategy embraces machine learning[more]

    Benedicte Gravrand, Opalesque Geneva for New Managers: The founder of a New York-based systematic trading firm, which offers a hybrid between alpha strategies and alternative feta at lower fees, describes his approa

  3. Larry Robbins' hedge fund Glenview buys 1m Tenet Healthcare shares[more]

    Komfie Manalo, Opalesque Asia: Glenview Capital Management said it bought an additional 979,482 shares at Tenet Healthcare Corp valued at $53.80 million, raising its stakes in the healthcare services company to 15.16%, reported

  4. Legal - Grayson’s hedge funds under scrutiny for possible ethics violations, Court rejects hedge fund’s motion to block merger of Samsung affiliates[more]

    Grayson’s hedge funds under scrutiny for possible ethics violations From Freebeacon.com: Rep. Alan Grayson is finding himself in hot water over managing hedge funds that bear his name, actions that are in possible violation of House ethics rules. Sitting members of Congress are prohibite

  5. Hedge funds decline in June as stocks tumble on Greek woes[more]

    From Bloomberg.com: Hedge funds posted losses across strategies last month as uncertainty over whether Greece will remain in the euro sent global stock markets tumbling. Winton Capital Management declined about 3.1 percent in June in its $12.1 billion Winton Futures Fund, leaving it down 1.9 percent

 

banner