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SAC’s Steven Cohen Denies Ex-Wife’s Revised Lawsuit Claim

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Feb. 10 (Bloomberg) -- SAC Capital Advisors LP founder Steven A. Cohen denied fraud allegations in a lawsuit filed by his former wife, Patricia Cohen, after a judge dismissed her racketeering claims.

Cohen today filed court papers denying his ex-wife’s surviving allegations in a suit she filed in Manhattan federal court in 2009. Patricia Cohen claimed Steven Cohen ran Stamford, Connecticut-based SAC Capital as a racketeering enterprise that engaged in insider trading, bank fraud and money laundering in violation of the Racketeer Influenced and Corrupt Organizations Act.

U.S. District Judge William H. Pauley dismissed the RICO claims on Jan. 27. He allowed other allegations against the SAC founder to move toward trial. Steven Cohen today filed a formal answer denying assertions contained in his ex-wife’s most recent amended complaint, which was filed Oct. 2.

According to the suit, Patricia and Steve Cohen were married in 1979, and Cohen in 1986 created SAC Trading Corp., of which he was sole shareholder.

Patricia Cohen alleged that Cohen placed all of the marital assets, except their apartment, into the company. The couple separated in 1988 and divorced in 1990.

During the marriage, Patricia Cohen said, her ex-husband invested more than $8.7 million in marital assets from SAC to purchase other New York City apartments. She alleged that while Steven Cohen claimed the investment was a complete loss, he was repaid about $5.5 million.

Divorce, Maintenance

During the divorce and in later discussions about spousal maintenance, Patricia Cohen claimed Steven Cohen concealed the existence of the funds from her, which she didn’t discover until 2006.

In November, SAC Capital agreed to plead guilty to securities fraud. The hedge fund agreed to end its investment advisory business and pay $1.8 billion. The plea deal must be approved by a judge before it can take effect. Cohen, 57, denies wrongdoing and hasn’t been charged with a crime.

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

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