Bharara Seeks Cohen Civil Case Stay Pending Criminal OutcomeJoshua Gallu and Saijel Kishan
Manhattan U.S. Attorney Preet Bharara asked an administrative judge to stay the Securities and Exchange Commission’s action against billionaire Steven A. Cohen until related criminal cases against his hedge fund and two former employees are resolved.
In a document dated July 26, Bharara said the SEC enforcement staff doesn’t object to postponing the administrative proceeding, which it filed on July 19 alleging that Cohen failed to supervise two portfolio managers who now face criminal insider trading charges.
Bharara last week announced related criminal charges against Cohen’s Stamford, Connecticut-based hedge fund SAC Capital Advisors LP, calling it “a veritable magnet for market cheaters” and saying the fund was being held responsible for insider trading by seven portfolio managers and analysts who worked there. Cohen hasn’t personally been charged criminally and has said that he will fight the SEC’s administrative action.
It is common to delay civil proceedings when related criminal proceedings that involve overlapping witnesses and documents are under way.
The SEC’s administrative proceeding and the parallel criminal cases “will involve largely the same witnesses, documents and other evidence,” Bharara said in the motion. “The continuation and disposition of the administrative proceeding as currently scheduled will substantially prejudice the pending criminal prosecutions and hinder the criminal enforcement of the securities laws at issue.”
SEC spokesman John Nester and Jonathan Gasthalter, a spokesman for SAC at Sard Verbinnen & Co., declined to comment.
The SEC’s Chief administrative law judge Brenda P. Murray had scheduled an initial hearing in Cohen’s matter for Aug. 26.