Judge Richard Sullivan has granted a request to stay proceedings in the civil forfeiture case against Steve Cohen’s SAC Capital until January of next year, reports Nate Raymond of Reuters. The civil case against the $14 billion hedge fund is demanding access to “any and all assets” of SAC Capital, which the prosecutors have alleged is involved in one of the biggest insider trading schemes of history.
SAC Capital facing criminal charges
At the same time SAC faces another ongoing battle, a criminal case against the hedge fund, charging that its employees have been trading on illegal tips for over a decade. In the civil case in question, prosecutors filed a request to delay the proceedings as documents discovery and depositions would negatively impact the criminal case. The representatives of the U.S. Attorney’s office said that several government witnesses have yet to be deposed in the criminal trial and requested to delay their depositions in the civil suit.
The judge voiced his concerns on halting the proceedings and then starting again from zero, however SAC’s lawyers said that they have been given huge amounts of data from the government in the criminal trial which is also relevant to the civil case, so they would have moved ahead in discovery when the case opens again in January. SAC Capital’s lawyers did not object to delaying the forfeiture case.
SAC Capital raising bonuses
Meanwhile SAC Capital is gearing up to stem the exit of employees by raising their bonuses. the 2014 bonuses have been increased by 3.5%, Bloomberg has learned. Despite of crumbling assets under management, SAC Capital has promised a minimum of $300,000 in compensation for equity analysts. The annual bonus that is given to equity, macro-economic and quantitative-trading portfolio managers is in the range of 15-25% of their profits.
SEC’s charges against SAC Capital
SAC Capital is up against the Securities and Exchange Commission as well—the U.S. financial regulator has raised allegations that Steve Cohen failed to supervise two of his employees, Mathew Martoma and Michael Steinberg. In its complaint the SEC has also moved to ban Steve Cohen from ever supervising investments again.
SAC released a lengthy white paper countering the allegations of the SEC. An interesting part of the rebuttal from SAC’s lawyers was that Cohen did not fail to supervise his employees, he was just too busy to supervise them. The incriminating email that was sent to Cohen from Steinberg included nonpublic information about Dell Inc. (NASDAQ:DELL) which Cohen simply missed to read because he gets 1000 emails everyday.