When a firm enters a guilty plea to securities fraud, perhaps it’s time to change the company name. Such could be the case with the name change of SAC Capital Advisers to Point72 Asset Management.
Letter to employees answers two questions
In a letter to employees on Tuesday reviewed by the New York Times, SAC, named for billionaire hedge fund manager Steven A. Cohen, will change its name and likely remain in the same location. The new name, Point72 Asset Management, is a play on the firm’s address, 72 Cummings Point Road, in Stanford, Ct. In Asia the firm will use the Point72 and EverPoint while the firm’s quantitative strategies will be named Cubist Systematic Strategies, a nod to Cohen’s preference for cubist art.
“Sense of continuity”
“It reminds us of a sense of continuity: our headquarters has been at 72 Cummings Point Road for more than a decade, and we anticipate it will be our home for many years to come,” Tom Conheeney, SAC’s president, was quoted as saying in the letter. “Perhaps more important, the name emphasizes we point to a successful future.”
The report noted that speculation around a name change and a potential downgrade in location was humming, and the letter answered both issues. Some thought that SAC’s spacious 35,000 square foot location may change as an anticipated trimming of the 850 head count was assumed as the firm contracted. After eight of SAC’s employees were convicted at trial or pleaded guilty to insider trading charges, the firm changed from a hedge fund to a less regulated family office to manage Cohen’s personal fortune of $9 billion. In 2013 the firm had $14 billion under management, while Cohen founded the firm in 1992 with $25 million under management.
“We have been through a great deal during the past few years,” Conheeney was quoted as saying. “Our new names, combined with the other changes we have announced, are intended to help us to move forward.”
SAC’s Cohen not out of woods yet
While Cohen looks to hire former federal prosecutor or securities regulator to monitor trading at his investment firm in response to the insider trading investigation, he faces the potential for additional regulatory charges for failure to supervise the illegal activities at his firm. Cohen has not been charged and the report said that criminal charges are unlikely.