The Astonishing Return Of Steven Cohen
RONALD OROL, 26 September 2017
In 2013, an insider-trading scandal took apart billionaire Steve Cohen’s otherwise incredibly successful hedge fund.
But surprising, perhaps shockingly, at least for those who haven’t followed the situation closely, Cohen is back. A 2016 settlement with the Securities and Exchange Commission will allow the beleaguered money-manager to accept outside money starting in January. Cohen hasn’t said whether he wants to take on other investors, but the consensus opinion is that he will the second he’s permitted. Expect to find lots of willing investors ready to allocate capital to his funds – and the intense glare of the nation’s securities regulator watching his every move.
“I say this with a certain pessimism, but I think he’ll have no difficulty marketing his fund to a certain kind of investor,” said Columbia Law School Professor John Coffee. “The investors don’t take the risk of criminal liability, Cohen and his fund managers do.”
In 2013, Preet Bharara, then the U.S. attorney for the Southern District of New York, issued an indictment of Cohen’s fund, S.A.C. Capital Advisors, the only time a whole hedge fund had been charged with insider trading. Specifically, the SEC charged Cohen with failing to supervise employees, some whom were convicted of insider trading while working for the fund.
