SEC charges Steven Cohen for failing to act on insider trading ‘red flags’
Dominic Rushe , 19 July 2019
Regulators have filed charges against billionaire investor and famed art collector Steven Cohen for failing to act on “red flags” suggesting insider trading at his hedge fund.
The move is a major blow for the founder of SAC Capital, whose company has been under investigation by the FBI, Securities and Exchange Commission (SEC) and other regulators for years. While the civil charges stop short of accusing Cohen of fraud, the SEC said he failed to spot signs that indicated insider trading by two portfolio managers at his Stamford, Connecticut, hedge fund.
“Both portfolio managers provided information to Cohen indicating that they may have had access to inside information to support their trading,” the SEC said in a statement. “In each case, Cohen received highly suspicious information that should have caused any reasonable hedge fund manager in Cohen’s position to take prompt action to determine whether employees under his supervision were engaged in unlawful conduct and to prevent violations of the federal securities laws. ”
