Anthony Noto, 08 January 2016
Authorities have spent almost a decade trying to corner Steven Cohen on insider trading charges. Today, the hedge-fund billionaire settled the long-standing case with the U.S. Securities and Exchange Commission.
The result: Cohen has been barred from managing client money until 2018. The settlement determined that the hedge fund manager failed to supervise an employee, Mathew Martoma, who was convicted of insider trading. The SEC ruled that Cohen’s family office must bring on an independent consultant to review their activity to make sure they remain compliant with securities laws.
“The strong combination of a two-year supervisory bar and additional oversight requirements achieves significant and immediate investor protection and deterrence, while ensuring that the activities of his funds are closely monitored going forward,” according to a prepared statement from Andrew Ceresney, director of the SEC’s enforcement division.
The deal marks a significant win for Cohen, who had been fighting the 2013 case. The SEC, which had initially sought to bar Cohen from the hedge fund industry for life, was forced to “pare back its case” after a series of events in 2014.