Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

SAC Capital’s Cohen Seeks Halt of Ex-Wife’s Lawsuit

Steven
Steven "Steve" Cohen, chairman and chief executive officer of SAC Captial Advisors LP. Photographer: Scott Eells/Bloomberg

Dec. 11 (Bloomberg) -- A lawyer for SAC Capital Advisors LP founder Steven Cohen urged a judge to dismiss a lawsuit by his ex-wife, who claims he ran his hedge fund as a racketeering enterprise.

Patricia Cohen sued her ex-husband in 2009, claiming Stamford, Connecticut-based SAC engaged in insider trading, bank fraud, money laundering and other acts that violated the Racketeer Influenced and Corrupt Organizations Act. Patricia Cohen called SAC “the product of an ongoing racketeering scheme.”

The suit is “basically a matrimonial claim” that should be heard in state court, Martin Klotz, a lawyer for Steven Cohen, told U.S. District Judge William Pauley in Manhattan yesterday.

The suit was dismissed in 2011 by U.S. District Judge Richard Holwell, who said Patricia Cohen took too long to bring her claims. In April, the U.S. Court of Appeals in New York reinstated the case, saying it was filed in time. Without ruling on the merits, the court found that she properly asserted her claims that her ex-husband violated the racketeering law, committed fraud and breached his fiduciary duty.

While the case was on appeal, Holwell left the bench for private practice. The case was reassigned to Pauley.

Third Revision

In September, Pauley said he would permit Patricia Cohen to amend the suit for a third time to add a claim against Steven Cohen’s brother, an accountant who is a defendant in the case, and to fix a paragraph in the complaint that refers to the court’s jurisdiction.

SAC agreed to close its investment advisory business as part of a $1.8 billion deal announced Nov. 4 to end a criminal probe and a money-laundering lawsuit filed by the U.S. Justice Department.

U.S. Attorney Preet Bharara in New York has called SAC “a veritable magnet for market cheaters.”

Steven Cohen faces an administrative claim accusing him of failing to properly supervise trading by employees. He hasn’t been charged.

The case is Cohen v. Cohen, 09-cv-10230, U.S. District Court, Southern District of New York (Manhattan).

To contact the reporter on this story: Bob Van Voris in federal court in Manhattan at rvanvoris@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.