CFTC Imposes Restrictions on Steve Cohen Until 2018

  • CFTC imposes ‘certain limitations’ on Cohen: Point72 counsel
  • Cohen able to return to managing outside money in 2018

Steven A. Cohen

Photographer: Scott Eells/Bloomberg

Steven A. Cohen will be barred from trading that falls under U.S. Commodity Futures Trading Commission jurisdiction until 2018 after reaching an agreement tied to his Securities and Exchange Commission ban for failing to supervise Matthew Martoma, who was convicted of insider trading.

Cohen is subject to CFTC sanction because the SEC found that he ignored red flags and failed to take prompt action to determine whether Martoma, a portfolio manager who reported to him, was engaged in unlawful conduct, the agency said in a statement Tuesday.

“Like with the SEC settlement, Steve’s settlement with the CFTC does not impose a financial penalty and Steve neither admits nor denies any allegations,” Kevin O’Connor, general counsel at Point72 Asset Management, Cohen’s family office, said in an employee memo obtained by Bloomberg. “Similarly, the CFTC order places certain limitations on Steve’s activities in CFTC-regulated markets until the expected expiration of the SEC’s restrictions in 2017.”

Cohen struck a deal with the SEC in January that would allow him to return to managing money as early as January 2018. The arrangement was seen as a victory for Cohen after regulators had pushed for harsher punishment. SAC Capital pleaded guilty in 2013 to securities fraud and agreed to pay a record $1.8 billion fine in a separate settlement with federal authorities.

SAC agreed at the time to return outside money and convert into a family office. The entity remains in existence to wind down a pool of illiquid assets, and will cease to function once that’s complete.

Before it's here, it's on the Bloomberg Terminal.