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Billionaire Steve Cohen Back In Hedge Fund Business

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“Billionaire Steve Cohen, considered to be one of the greatest traders ever, has found a way back into the hedge fund business after years of fighting with federal prosecutors and securities regulators over insider-trading allegations.”

Billionaire Steve Cohen, considered to be one of the greatest traders ever, has found a way back into the hedge fund business after years of fighting with federal prosecutors and securities regulators over insider-trading allegations, reports Forbes. According to Vanity Fair, Mr. Cohen can be called the luckiest man ion Wall Street for escaping all those federal charges.

On Friday, January 22nd, the Securities & Exchange Commission said that it has settled its civil enforcement action which accused Cohen of failing to supervise Mathew Martoma, a former portfolio manager who was convicted of insider trading for trades he made at an affiliate of Cohen’s SAC Capital hedge fund, according to Forbes. The SEC settlement, in which Cohen neither admits nor denies that he failed to supervise Martoma, bars Cohen from managing client money until 2018.

Cohen and his SAC Capital hedge funds for insider trading were being investigated by the SEC and FBI for years. “Federal prosecutors in Manhattan managed to win some criminal cases against people who worked at SAC, but they were never able to bring a criminal case against Cohen, who always denied any wrongdoing,” reports Forbes. Federal prosecutors did indict Cohen’s SAC Capital and the hedge fund firm pleaded guilty to insider-trading related charges in November 2013, paying $1.8 billion to the federal government in penalties and fines. The guilty plea deal also forced the firm to stop managing outside money.

According to Forbes, at the same time, the SEC launched an administrative action against Cohen and was reportedly seeking to ban him for life from the securities industry, which is what Friday’s settlement is all about. The federal government’s SAC Capital-related cases, meanwhile, were dealt a serious setback by an appeals court ruling and several of the insider trading convictions federal prosecutors had obtained in recent years were overturned.

Since shutting down SAC Capital, Cohen has been successfully managing his own money in Point72 Asset Management, which is run like a big-time hedge fund firm with hundreds of employees but with only one client, Cohen himself.

As cleverly pointed out by Vanity Fair, the settlement could mean “ratings gold for the upcoming hedge-fund drama Billions, premiering on Showtime (…)” The show centers around the U.S. District Attorney’s Office zeroing in on a modern-art-loving hedge-fund billionaire in a high-charged insider-trading case—details which, to anyone who even loosely followed the SAC case, sound strikingly similar to Cohen and his firm.

Jane Ostrovsky

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