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Komfie Manalo, Opalesque Asia: The Securities and Exchange Commission (SEC) on Friday barred hedge fund
manager Steven A. Cohen from supervising funds that manage outside money
until 2018 in order to settle charges for failing to supervise a former
portfolio manager who engaged in insider trading while employed at his
firm.
The SEC also ordered Cohen’s family firms to be subjected
under SEC examinations and to retain an independent consultant to
conduct periodic reviews of their activities to ensure compliance with
securities laws.
"Before Cohen can handle outside money again, an independent consultant
will ensure there are legally sufficient policies, procedures, and
supervision mechanisms in place to detect and deter any insider
trading," said Andrew J. Ceresney, Director of the SEC’s Enforcement
Division. "The strong combination of a two-year supervisory bar and
additional oversight requirements achieves significant and immediate
investor protection and deterrence, while ensuring that the activities
of his funds are closely monitored going forward."
The SEC’s order finds that Cohen failed to supervise former portfolio
manager Mathew Martoma, who engaged in insider trading in 2008 while
employed at CR Intrinsic Investors, an investment advisory firm that was
a wholly-owned subsidiary of S.A.C. Capital Advisors LLC, an entity
founded and controlled by Cohen.
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