Cohen-SAC Timeline: Firm’s Guilty Plea End Criminal Case
Billionaire Steven Cohen’s SAC Capital Advisors LP, the hedge-fund firm accused of fostering a culture of rampant insider trading, has agreed to plead guilty to federal charges and pay $1.8 billion.
Cohen, who wasn’t charged criminally, faces an administrative action filed by the U.S. Securities and Exchange Commission for his alleged failure to supervise the hedge fund’s activities. Here is a timeline of Cohen and his firm:
1977: Cohen graduates from University of Pennsylvania’s Wharton School with a bachelor’s degree in economics, then joins New York-based brokerage Gruntal & Co.
1992: Cohen leaves Gruntal to start SAC Capital with $25 million and nine employees. Marries second wife, Alexandra.
1998: Cohen buys Greenwich, Connecticut, mansion for $14.8 million.
1999: SAC assets under management exceed $1 billion.
2000: SAC posts a 73 percent return, its highest ever.
2001: SAC assets reach $3.6 billion. Firm starts Sigma Capital Management unit in New York. At least three former and current SAC employees linked to insider trading have worked at the unit.
2004: SAC starts CR Intrinsic Investors unit. At least three former SAC employees linked to insider trading worked at the unit.
2007: SAC assets peak at about $16.5 billion.
2008: SAC posts first annual loss of 19 percent amid global financial crisis.
October 2009: Billionaire hedge-fund manager Raj Rajaratnam of Galleon Group LLC is arrested on insider-trading charges. Former SAC employee Richard Choo-Beng Lee pleads guilty to conspiracy to commit securities fraud tied to the probe of Galleon.
January 2010: Former SAC analyst Jonathan Hollander is the first employee to be named in an insider-trading case, accused in an SEC lawsuit over transactions in his own account. He settles with the agency in April 2011, paying a fine without admitting or denying wrongdoing.
November 2010: Hedge-fund firms including Diamondback Capital Management LLC and Level Global Investors LP, run by SAC alumni, are raided by the FBI. SAC receives government subpoena for documents.
February 2011: Former SAC money managers Noah Freeman and Donald Longueuil are charged in insider-trading case. Freeman, who has pleaded guilty and is cooperating with prosecutors, had told investigators in December 2010 that it was “understood” by SAC money managers that providing Cohen with one’s best trading ideas involved providing him with inside information. Longueuil later pleads guilty and is sentenced to 30 months in prison.
January 2012: Former technology analyst Jon Horvath is arrested on charges of securities fraud. He later pleads guilty and is cooperating with the government.
July 2012: Wesley Wang, a former SAC analyst pleads guilty to securities fraud. He admits to passing on tips to former money manager Dipak Patel, who wasn’t charged. Wang is later sentenced to two years’ probation after cooperation with the government’s investigation.
September 2012: Long-serving SAC employee Michael Steinberg is named as an unindicted co-conspirator. Steinberg is put on leave at the firm.
November 2012: Former SAC money manager Mathew Martoma is arrested in what prosecutors call the biggest insider-trading case they have uncovered. The case links Cohen to the probe for the first time. Martoma later pleads not guilty and is scheduled to go on trial in January 2014. SAC receives Wells notice, a warning that it may be sued by the SEC.
January 2013: SAC assets at $15 billion.
February 2013: SAC clients, including Citigroup Inc.’s private bank and Societe Generale SA’s Lyxor Asset Management unit, start exiting, pulling $1.68 billion. Cohen increases bonuses to help retain employees.
March 15, 2013: SAC settles with SEC, agreeing to pay $616 million. The firm says the accord is a “substantial step toward resolving all outstanding regulatory matters and allows the firm to move forward with confidence,” and that it is “committed to continuing to maintain a first-rate compliance effort woven into the fabric of the firm.” A judge has signed off on the accord, pending approval of a separate case unrelated to SAC.
March 2013: Cohen buys Pablo Picasso’s “Le Reve” for $155 million from casino owner Steve Wynn, purchases $60 million oceanfront property in East Hampton, Long Island, and puts Manhattan penthouse on sale for $115 million.
March 29, 2013: Steinberg is arrested and charged in insider-trading probe. He pleaded not guilty and is scheduled to go on trial on Nov. 18.
May 17, 2013: SAC tells clients it will no longer cooperate unconditionally with the government. Several SAC executives receive subpoenas.
July 19, 2013: The SEC accuses Cohen of failing to supervise former health-care money managers Martoma and Steinberg. SAC says Cohen acted “appropriately at all times and will fight this charge vigorously.”
July 23, 2013: Former SAC money manager Richard Lee secretly pleads guilty to insider-trading charges and is cooperating with the government.
July 25, 2013: U.S. indicts SAC, accusing it of engaging in an unprecedented insider-trading scheme for more than a decade and describing the firm as a “veritable magnet for market cheaters.” SAC says it has never “encouraged, promoted or tolerated insider trading and takes its compliance and management obligations seriously.” Cohen vows to keep the business open.
August 2013: SAC executives expect the firm to manage $9 billion at the start of 2014 after client redemptions.
Nov. 4, 2013: SAC agrees to plead guilty to insider-trading charges, pay $1.8 billion and shut its investment-advisory business.
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