Sat, Aug 27, 2016
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. Strategies - The 'Holy Grail' hedge fund strategy to handle a black swan the size of World War I, Hedge funds get more pushback on terms as enthusiasm for strategy wanes[more]

    The 'Holy Grail' hedge fund strategy to handle a black swan the size of World War I From IBTImes.co.uk: To illustrate a strategic gap common to today's portfolio managers, George Sokoloff, PhD, founder and CIO at Carmot Capital, proposes an interesting thought experiment – a breakdown of

  2. Institutional investors - Investors set to increase allocation to private debt, With investment income key, Richmond retirement system faces funding challenges[more]

    Investors set to increase allocation to private debt Investors are set to increase their allocation to private debt, with 60% revealing they believe the private debt market will grow over the next 12 months, according to a new study by Elian, a leading funds services provider. 41%

  3. Investing - Hedge funds snap up banks, unload Apple, Some of hedge funds' favorite stocks are finally starting to beat the market, Einhorn's Greenlight shifts positions, Treasury yield climbs to two-month high as Fischer joins hawks, 9 stocks smart investors put their money in last quarter[more]

    Hedge funds snap up banks, unload Apple From Barrons.com: Prominent hedge funds have a newfound love of big banks, and some have a distaste for shares of Apple, regulatory filings released last week show. The filings suggest that the funds have been pivoting their portfolios in recent mon

  4. Chesapeake energy seeks $1 billion loan to refinance debt[more]

    From Bloomberg.com: Chesapeake Energy Corp. is seeking a $1 billion loan as the company battered by cratering fuel prices and credit downgrades takes a step to address its $9 billion debt load. The natural gas producer hired Goldman Sachs Group Inc., Citigroup Inc. and Mitsubishi UFJ Financial Group

  5. Institutions - Nordic pension funds magnify focus on unlisted and direct investing, building up teams[more]

    From IPE.com: As bond yields remain at low or negative levels, pension funds and other institutional investors in the Nordic region are stepping up efforts to find higher returns by adding more unlisted investments to portfolios and are expanding in-house teams in order to do this, according to new