SAC Capital has recently agreed to plead guilty to multiple counts of fraud and is expected to be reduced to a family outfit handling the personal fortune of owner Steven A. Cohen, but now the big question is whether Cohen himself will be charged. Video testimony from a 2011 deposition of Cohen has been released by Nick Verbitsky, Martin Smith, and Dan Sugarman at PBS showing the hedge fund owner getting testy and defensive while talking about insider trading.

Steve Cohen

Cohen on insider trading information

“The way I understand the rules on trading inside information it’s very vague,” says Cohen. He tells attorney Michael Bowe that he is serious about compliance and about preventing insider trading at his firm, but when asked if he has actually read the rules governing insider trading he says, “I rely on my counsel…I might have read them, I just don’t remember them.”

He also seems uncomfortable when Bowe presses him on whether SAC trading manual is meant to be strictly adhered to. “The vast majority of the time it is adhered to, but there are times when I can think of situations when it doesn’t have to be,” says Cohen. He also repeatedly tells Bowe that he trusts his traders’ experience in such matters.

Michael Bowe questions Cohen

Bowe asks Cohen if he thinks it would be okay to short a company because a reporter tipped off one of his traders that a negative story was coming out about it. He pauses to think for 25 seconds before answering: “If the story was not coming out in a relatively short period of time I would say there was ambiguity on that. I think it might be okay.”

Now that SAC has pled guilty, investigators will have to decide how much Cohen knew about what was going on at his firm, and especially whether he was encouraging insider trading. There’s nothing in the deposition that incriminates Cohen (he’d probably have been charged by now if there was), but any investigator watching the video would probably want to keep digging. With SAC’s deal leaving Cohen open to both criminal and civil suits, it would be pretty surprising if he doesn’t end up in court one way or another.