http://www.zerohedge.com/news/2013-07-23/final-straw-sac-criminal-charges-be-filed-week
Submitted by Tyler Durden on 07/23/2013 22:18 -0400
http://www.businessinsider.com/report-prosecutors-to-fine-criminal-charges-against-hedge-fund-sac-2013-7
The Final Straw For SAC: Criminal Charges To Be Filed This Week
It would appear the camel's back of the career of Steve Cohen and his firm SAC Capital has received its last straw. As the WSJ reports, Federal prosecutors plan to bring criminal charges against the firm as early as this week.This spells trouble for SAC which, while still reeling from the SEC's attempt to effectively shut it down, will now have to fight a two front war; defending its key executives against criminal charges as well, including the risk of jail time for what is most likely going to be a securities fraud charge. While a disgraced Steve Cohen may, in theory, run his or whatever employees' he has left, money as a "family office", it would take a very strong wi-fi signal to do that from even a minimum security prison should he finally suffer Martha Stewart's fate.
Via WSJ,
Federal prosecutors are preparing to announce criminal charges as early as this week against SAC Capital Advisors LP, the hedge-fund company that has been the target of a multiyear investigation into alleged insider trading, according to people familiar with the matter.The planned charges against SAC would mark the culmination of a years-long probe into suspected securities fraud at one of the biggest, most successful hedge-fund firms in the country.The action is anticipated barring any last-minute pact with SAC or other reversal of government strategy, according to people familiar with the matter....The government's planned move would potentially end the 20-year-old firm's history of managing client money, based on past government actions against financial firms....Mr. Cohen, who started the Stamford, Conn., firm in 1992, isfighting a civil administrative action levied last week by the Securities and Exchange Commission that he failed to supervise his firm properly and instead fostered a culture that rewarded trading using material, nonpublic information, which is illegal. SAC has said the firm and Mr. Cohen have acted appropriately....SAC fired back this week at the government's civil allegations that Mr. Cohen failed to prevent insider trading at his firm, referring to some of the allegations as "baseless" and arguing that he didn't ignore "red flags" that should have signaled improper trading. The SAC rebuttal, in a 46-page paper prepared by lawyers for Mr. Cohen and reviewed by The Wall Street Journal, was distributed to SAC employees Monday afternoon.
http://www.businessinsider.com/report-prosecutors-to-fine-criminal-charges-against-hedge-fund-sac-2013-7
BIG report from WSJ.
Reporters Jenny Strasburg and Michael Rothfeld say that prosecutors are set to file criminal charges against the hedge fund SAC Capital.
The planned charges against SAC would mark the culmination of a yearslong probe into suspected securities fraud at one of the biggest, most successful hedge-fund firms in the country.
The action is anticipated barring any last-minute pact with SAC or other reversal of government strategy, according to people familiar with the matter.
As Strasburg and Rothfeld note, this represents the culmination of a long effort to get the firm on insider trading charges.
The good news, according to the report, is that the charges are likely to be against the firm, not Cohen himself.
Just last week, Cohen was sued by the SEC (a civil action) for failure to properly supervise his traders. The SEC sought, then to ban Cohen from investing money.
At the time that weak charge was seen as something of a "win" for Cohen, although it was clear that he is planning a vigorous defense of that. Over the weekend, Cohen distributed a 46-page white paper internally explaining why the SEC's suit was wrong. You can read that paper here.
Already the firm has seen huge investor outflows, and multiple charges against the firm (both criminal and civil) will likely further debilitate it.
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