DOJ Poised To File Criminal Charges Against SAC Capital

DOJ Poised To File Criminal Charges Against SAC Capital
See page for author [Public domain], via Wikimedia Commons

The United States Department of Justice (DOJ) is expected to file a criminal case against SAC Capital, the hedge fund headed by billionaire investor Steven A. Cohen, on Thursday, according to a report from Reuters based on information from people with knowledge about the issue.

Play Quizzes 4

DOJ Poised To File Criminal Charges Against SAC Capital

SAC Capital charged with fraud

SAC Capital will be charged with securities and wire fraud after almost seven years of investigation against the hedge fund on accusations of insider trading. A source familiar with the issue said authorities have no intention of filing criminal charges against Cohen. However, the billionaire investor will face an administrative hearing and he could face allegations of failing to supervise his employees, who committed insider trading activities under his supervision. The Securities and Exchange Commission (SEC) could penalize Cohen and even bar him from overseeing any investment fund, which could lead to closure of SAC Capital.

Fund Manager Profile: Zhang Hui Of China’s Southern Asset Management

investHistorically, the Chinese market has been relatively isolated from international investors, but much is changing there now, making China virtually impossible for the diversified investor to ignore. Earlier this year, CNBC pointed to signs that Chinese regulators may start easing up on their scrutiny of companies after months of clamping down on tech firms. That Read More

According to a spokesperson for the hedge fund, Cohen will vigorously deny the failure-to-supervise allegations against him.

Last May, it was reported that Cohen is considering the idea of closing SAC Capital and opening a “family office” to manage his personal fund. The billionaire investor has $9 billion investments in his hedge fund. The report emerged after Cohen received a subpoena to testify before a grand jury after SAC Capital failed to reach a settlement agreement to end the insider trading investigation against it.

Cohen claims Fifth Amendment

Earlier this month, Cohen claimed his right to the Fifth Amendment to prevent self incrimination in connection with the insider trading investigation. Several lawyers following the investigation against the hedge fund opined that they will give the same advice to Cohen, given the fact that authorities are trying to build a case against him.

Authorities intensified their investigation, and they are currently investigating some of the previous employees of SAC Capital, including former technology stock trader Dipak Patel, who managed almost $1 billion worth of investments during his tenure at the hedge fund. Sources said he could face criminal charges after being implicated in a possible improper trading committed by Wesley Wang, a former SAC Capital analyst who pleaded guilty and agreed to cooperate as a witness for the prosecutors.

At present, nine executives, as well as nine former and current employees of SAC Capital, have been charged or implicated in insider trading activities, including Mathew Martoma and Michael Steinberg, who were both arrested.

Updated on

Marie received her Bachelors Degree in Mass Communication from New Era University. She is a former news writer and program producer for Nation Broadcasting Corporation (NBC-DZAR 1026), a nationwide AM radio station. She was also involved in events management. Marie was also a former Young Ambassador of Goodwill during the 26th Ship for Southeast Asian Youth Program (SSEAYP). She loves to read, travel and take photographs. She considers gardening a therapy.
Previous article Hershey Co (HSY) Earnings Beat Estimates By A Penny
Next article Xerox Corporation (XRX) Beats Expectations In Q2

No posts to display