SAC Capital could be in even deeper trouble. Federal prosecutors are expected to file criminal charges against the firm as early as this week. The U.S. Attorney’s Office in Manhattan is siding with the Securities and Exchange Commission in attempting to shut down the firm run by Steven Cohen, who faces a civil case filed by regulators last week. They’re attempting to bar Cohen from ever managing an investment fund again.
Sources leak details about the charges against SAC Capital
DealBook’s Ben Protess and Peter Lattman and The Wall Street Journal’s Jenny Strasburg and Michael Rothfeld cite sources who say prosecutors along with the Federal Bureau of Investigation will likely announce the charges in the next several days. Steven Cohen himself is not expected to face criminal charges himself, although sources apparently said that further charges against other employees at SAC Capital are not out of the question.
At this point the deadline has passed for officials to file charges in some cases, although it’s expected that they will work around the deadline by posting the case as a broader criminal conspiracy case against the entire firm. All officials need is for one of the trades in the case to have happened within the last five years, some of which apparently did. They can then pull in older trades to showcase an ongoing theme of insider trading conspiracy at SAC Capital.
Steven Cohen denies reading all of his emails
According to DealBook, the civil case against Steven Cohen hinges on his email habits. Regulators allege that he failed to take steps to prevent insider trading at his firm, and they point to an email sent to Cohen. He claims, however, that he never read the email, which is why he never responded to it.
His lawyers said no witness can testify that they discussed the email with him because he never read it or talked about it with anyone. They also said that he received, on average, 1,000 emails every day in 2008, and at that time, he read only about 11 percent of them. It’s unknown how they arrived at those numbers. They did explain what sounds like a complex method of reading email. They said he would have to look at one of his seven computer screens and then minimize other programs so that he could view his email.