Month: July 2013

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Article: Indictment Won’t Stop Steve Cohen from Hosting a Hamptons Tuna Party

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Indictment Won’t Stop Steve Cohen from Hosting a Hamptons Tuna Party

Nitasha Tiku, 29 July 2013

Try as they might, the feds haven’t been able to slow Steve Cohen’s roll.

Force his $14 billion hedge fund, SAC Capital, pay a $616 million settlement for insider trading accusations? He goes out and buys a Picasso and a second Hamptons manse down the road from his first one. Serve SAC Capital a five-count criminal indictment for insider trading? He throws a flashy party at his 9,000 square foot estate on Further Road. Continue reading “Article: Indictment Won’t Stop Steve Cohen from Hosting a Hamptons Tuna Party”

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Article: JP Morgan Chase’s alleged manipulation of electricity markets detailed

Article - Media

JP Morgan Chase’s alleged manipulation of electricity markets detailed

Kevin G. Hall

McClatchyDC, 29 July 2013

The federal regulator of electricity markets on Monday accused Wall Street powerhouse JP Morgan Chase & Co. of using multiple trading strategies to manipulate electricity markets in California and the Midwest for profit.

The Federal Energy Regulatory Commission already had alleged in March that JP Morgan Chase was guilty of manipulating energy markets in California and the Midwest. But late Monday, after the close of financial markets, the agency made public the details in a Staff Notice of Alleged Violations.

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Article: CEO Mocks Steve Cohen In Bizarre Full-Page Wall Street Journal Ad

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CEO Mocks Steve Cohen In Bizarre Full-Page Wall Street Journal Ad

Quartz, 28 July 2013

The background is that Patrick Byrne, chief executive of Overstock.com, is among the most vocal critics of naked short selling, which some investors, including SAC Capital founder Steve Cohen, use to drive down the stock price of companies that they’ve bet against. Byrne once famously called Cohen a “Sith Lord,” referencing a Star Wars villain, for engaging in naked short sales of Overstock.com. Deep Capture, the website referenced in today’s ad, is funded by Byrne. Continue reading “Article: CEO Mocks Steve Cohen In Bizarre Full-Page Wall Street Journal Ad”

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Article: Naked Short Selling and the Market Impact of Fails-to-Deliver Evidence from the Trading of Real Estate Investment Trusts

Article - Academic

Naked Short Selling and the Market Impact of Fails-to-Deliver: Evidence from the Trading of Real Estate Investment Trusts

Erik Devos, Thomas McInish, Michael McKenzie, James Upson

The Journal of Real Estate Finance and Economics, 27 July 2013

Naked short selling and purposeful fails-to-deliver have been identified in the popular press and by the SEC as contributing factors to the stock market decline in 2008. We investigate the market impact of the announcement that fails-to-deliver have occurred for a sample of real estate investment trusts (REITs). We find little evidence that this announcement affects returns or has any market manipulation ability. We find that fails-to-deliver are most consistent with a 1 to 3 days delivery difference between the short sale and offsetting covering trades. These results hold independent of the type of REIT (equity or mortgage REITs). Overall, our findings suggest that naked short selling and purposeful fails-to-deliver may not have contributed much to REIT losses during the financial crisis.

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Article: Stephen Cohen’s hedge fund SAC Capital charged with insider trading

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Stephen Cohen’s hedge fund SAC Capital charged with insider trading

Reuters, 26 July 2013

US prosecutors indicted billionaire Steven A. Cohen’s hedge fund for insider trading, a rare move that could end the career of one of Wall Street’s most successful investors and trigger a fundamental change in how traders try to gain an edge over rivals.

The government accused SAC Capital Advisors LP of presiding over a culture where employees flouted the law and were encouraged to tap their personal networks of contacts for inside information about publicly traded companies. Continue reading “Article: Stephen Cohen’s hedge fund SAC Capital charged with insider trading”

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Article: A hedge on the edge: SAC Capital’s insider trading scandal

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A hedge on the edge: SAC Capital’s insider trading scandal

The Conversation, 26 July 2013

After causing the collapse of the Galleon Group hedge fund in 2009, insider trading enforcements have once again shaken the hedge fund industry. Late last week, the US Securities and Exchange Commission (SEC) charged Steven A. Cohen, CEO of SAC Capital Advisors LP, one of the world’s largest hedge funds, with failing to supervise two of his managers, Mathew Martoma and Michael Steinberg, who traded on material non-public information concerning three US listed companies in 2008. Continue reading “Article: A hedge on the edge: SAC Capital’s insider trading scandal”

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Article: SAC: federal grand jury indicts hedge fund for insider trading

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SAC: federal grand jury indicts hedge fund for insider trading

Heidi Moore, 26 July 2013

A federal grand jury has indicted SAC Capital, the embattled hedge fund that has been pursued by financial authorities for years, for insider trading after regulators failed to charge its powerful founder, Steven A Cohen.

The US attorney who brought the charges, Preet Bharara, also hit the firm with civil money-laundering charges that would require the firm to forfeit potentially billions of dollars in assets. Continue reading “Article: SAC: federal grand jury indicts hedge fund for insider trading”

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Article: Feds charge billionaire Steven A. Cohen’s hedge fund SAC Capital with insider trading

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Feds charge billionaire Steven A. Cohen’s hedge fund SAC Capital with insider trading

BARBARA ROSS and BILL HUTCHINSON, 26 July 2013

Wall Street’s richest hedge fund, SAC Capital Advisors, owned by billionaire Steven Cohen, was indicted Thursday by a federal grand jury on charges of being an insider-trading machine. Prosecutors charge that SAC made “hundreds of millions of dollars of illegal profits” from 1999 to 2010 by recruiting employees based on trade secrets they brought to the firm, or if they had the know-how to get them.

The scheme “was substantial, pervasive and on a scale without known precedent in the hedge-fund industry,” the indictment charges. Continue reading “Article: Feds charge billionaire Steven A. Cohen’s hedge fund SAC Capital with insider trading”

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Article: U.S. charges SAC Capital with insider trading crimes

Article - Media, Publications

U.S. charges SAC Capital with insider trading crimes

Emily Flitter, Svea Herbst-Bayliss, Jonathan Stempel, 25 July 2013

U.S. prosecutors indicted billionaire Steven A. Cohen’s hedge fund for insider trading, a rare move that could end the career of one of Wall Street’s most successful investors and trigger a fundamental change in how traders try to gain an edge over rivals. Continue reading “Article: U.S. charges SAC Capital with insider trading crimes”

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Article: SAC Capital indicted in 6-year US insider trading probe

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SAC Capital indicted in 6-year US insider trading probe

Patricia Hurtado, 25 July 2013

SAC was indicted on 4 counts of securities fraud, 1 count of wire fraud in an indictment unsealed in Manhattan federal court. Manhattan: SAC Capital Advisors LP, the $14 billion hedge fund founded by Steven A. Cohen, was indicted by a US grand jury as part of the government’s six-year crackdown on insider trading on Wall Street. Continue reading “Article: SAC Capital indicted in 6-year US insider trading probe”

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Article: SEC Charges Steven A. Cohen with Failing to Supervise Employees Who Allegedly Engaged in Insider Trading

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SEC Charges Steven A. Cohen with Failing to Supervise Employees Who Allegedly Engaged in Insider Trading

Vincent PitaroHedge Fund Law Report, 25 July 2013

On July 19, 2013, the SEC instituted administrative proceedings against Steven A. Cohen, the embattled founder of hedge fund adviser S.A.C. Capital Advisors, LLC (SAC). Generally, the SEC charges Cohen with failing to supervise two of his portfolio managers, Mathew Martoma and Michael Steinberg, both of whom have been indicted on insider trading charges arising out of their trading for hedge funds advised by SAC. See “Fund Manager CR Intrinsic and Former SAC Portfolio Manager Are Civilly and Criminally Charged in Alleged ‘Record’ $276 Million Insider Trading Scheme, Hedge Fund Law Report, Vol. 5, No. 44 (Nov. 21, 2012). Continue reading “Article: SEC Charges Steven A. Cohen with Failing to Supervise Employees Who Allegedly Engaged in Insider Trading”

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Article: Steve Cohen Fights Back Against Claims Of Insider Trading

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Steve Cohen Fights Back Against Claims Of Insider Trading

JIM ZARROLI, 23 July 2013

From NPR News, this is ALL THINGS CONSIDERED. I’m Melissa Block. Billionaire Steven Cohen is fighting back. He faces federal charges that he didn’t do enough to prevent insider trading at his hedge fund SAC Capital.

As The Wall Street Journal reported this morning, Cohen’s firm issued a rebuttal, claiming that he never saw an email that’s an important part of the government’s case. Here’s NPR’s Jim Zarroli. Continue reading “Article: Steve Cohen Fights Back Against Claims Of Insider Trading”

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Article: SEC charges SAC Capital’s Steven Cohen over insider trading

Article - Media, Publications

SEC charges SAC Capital’s Steven Cohen over insider trading

Verdict Staff, 22 July 2013

The US Securities and Exchange Commission (SEC) has filed civil charges against Steven Cohen, head of the hedge fund SAC Capital, for failing to supervise two portfolio managers and prevent insider trading.

In the complaint, the SEC alleges that Cohen received highly suspicious information that should have caused any reasonable hedge fund manager to investigate the basis for trades made by two portfolio managers who reported to him, Mathew Martoma and Michael Steinberg. Continue reading “Article: SEC charges SAC Capital’s Steven Cohen over insider trading”

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Article: Busting Steve Cohen: How a Minor Charge Threatens a Major Figure

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Busting Steve Cohen: How a Minor Charge Threatens a Major Figure

Charles Gasparino, 22 July 2013

After years of investigations, wiretaps, and coercing cooperation from numerous witnesses, the government’s big insider trading case against hedge fund impresario and long-time target Steve Cohen may come down to a single “failure to supervise” charge.

That’s right: No insider trading charges; no criminal charges; and no fraud allegations. It sounds like pretty weak stuff considering what the Feds believe to be the scope of the crime: numerous instances of insider trading at the massive hedge fund that Cohen runs, the Stamford, Connecticut-based SAC Capital — and possibly the direct involvement of Cohen himself in some of those trades. Continue reading “Article: Busting Steve Cohen: How a Minor Charge Threatens a Major Figure”

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Article: US billionaire Steven Cohen to answer case over insider trading

Article - Media, Publications

US billionaire Steven Cohen to answer case over insider trading

After a long investigation into insider trading at the hedge fund SAC Capital Advisors, an inquiry that has produced several guilty pleas and a record US$616 million civil penalty, the US government has brought a case for the first time against the fund’s billionaire owner, Steven Cohen.

In a civil action, the Securities and Exchange Commission accused Cohen, 57, of failing to supervise former employees who face criminal charges.

The commission contends that he ignored “red flags” that should have led him to investigate suspicious trading activity at SAC and take steps to prevent illegal conduct.

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