SAC Capital Advisors LP founder Steven Cohen asked a court to dismiss his ex-wife’s lawsuit accusing him of running his hedge fund as a racketeering enterprise.
Patricia Cohen’s amended complaint was dismissed by U.S. District Judge Richard Holwell in Manhattan in 2011 after he said she took too long to bring the case, which was first filed in 2009.
In April, the U.S. Court of Appeals in New York reinstated it, saying the suit was filed in a timely manner. The court also said Patricia Cohen validly stated claims that her ex-husband violated the Racketeer Influenced and Corrupt Organizations Act, committed fraud and breached his fiduciary duty.
Steven Cohen’s lawyer, Martin Klotz, argued in court papers today that the appeals court returned the case back to a lower-court judge to decide whether the case should be dismissed for any other reasons not considered by Holwell.
“Plaintiff’s claims -- which purport to make a federal RICO case out of what is really a straightforward claim that she received too little in settlement of a state court divorce proceeding -- are fundamentally and fatally flawed,” Klotz said in a motion to U.S. District Judge William Pauley in Manhattan.
Pauley, who took over from Holwell after he left the bench, asked lawyers for the Cohens at a June hearing if the parties could settle the case.
Patricia Cohen’s lawyer, Josh Dratel, said his side was open to negotiation. Klotz said Steven Cohen considered the suit “utterly bogus” and was “not prepared to spend money on such a made-up suit.”
Patricia Cohen said in her lawsuit that SAC Capital was “the product of an ongoing racketeering scheme” that has engaged in insider trading, bank fraud, money laundering and other misconduct. In June 1986, Cohen, under oath, refused to answer regulators’ questions about alleged insider trading involving a General Electric Co. (GE) acquisition, invoking his right not to incriminate himself, according to her complaint.
Dratel declined to comment on today’s filing. He said he would file a response by Sept. 12.
The case is Cohen v. Cohen, 11-1390, U.S. Court of Appeals for the Second Circuit (Manhattan), and 09-cv-10230, U.S. District Court, Southern District of New York (Manhattan).
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