SAC Capital Advisors LP may be charged by the U.S. as soon as this week in a criminal insider trading investigation, while no charges are planned against founder Steve Cohen, the Wall Street Journal reported, citing unidentified people familiar with the matter.
A last-minute settlement that would avert the charges is unlikely, the newspaper said. SAC said in May that it was no longer cooperating unconditionally with the government.
Cohen last week was accused in an administrative action by the U.S. Securities and Exchange Commission of failing to supervise two SAC portfolio managers facing criminal insider trading charges.
If its proceedings are successful, the SEC could force Cohen, a billionaire who boasts one of the best long-term track records in history, out of the hedge-fund business even though the agency hasn’t accused him of personally trading on inside information.
SAC, based in Stamford, Connecticut, oversees $15 billion, about 60 percent of which is money from Cohen and employees. Cohen, 57, hasn’t been charged criminally despite a multiyear probe by the U.S. attorney’s office in Manhattan and the Federal Bureau of Investigation.
Peter Donald, a spokesman in the FBI’s New York office, declined to comment yesterday on any planned criminal charges against SAC. Jonathan Gasthalter, an SAC spokesman at Sard Verbinnen, also declined to comment.
Cohen has said he acted appropriately in trading any shares. Ted Wells, a lawyer for Cohen, didn’t immediately respond after regular business hours to a voice-mail message seeking comment.
In the SEC’s July 19 filing, the agency presented new details that it said showed Cohen received “highly suspicious” information that should have caused any reasonable hedge-fund manager to investigate the basis for the alleged wrongdoing.
SAC on July 22 rebutted many of the facts outlined in the SEC’s administrative action in a 45-page report issued to the firm’s employees. There’s no evidence that Cohen ever read an e-mail on Dell Inc. that the SEC cited as evidence that he failed to supervise his employees, according to the report.