The SEC is not giving up on its case against disgraced hedge fund billionaire Stevie Cohen. On Monday, the SEC announced it was moving ahead with an amended civil case against hedge-fund billionaire Steven Cohen, after prosecutors had to drop a related insider-trading case against one of his employees following an appeals court ruling overturning an earlier conviction.
Attorneys for both the SEC and for Cohen told an administrative judge they had held settlement talks in the nearly three-year-old case claiming the SAC Capital Advisors LP founder did not adequately supervise two of his senior traders, but they have been unable to negotiate a deal.
Of note, the securities violation charges against Cohen are related to an already completed criminal probe against employees of SAC Capital.
The civil case led by the SEC has been on hold since July 2013 as federal prosecutors pursued criminal charges. They won convictions of traders Michael Steinberg and Mathew Martoma, but Steinberg’s conviction was overturned in appeals court.
The agency noted on Monday that it planned to amend its case against Stevie Cohen to focus specifically on allegations related to the lack of supervision of SAC trader Matthew Martoma.
As reported by ValueWalk, Cohen was compelled to transform his hedge fund SAC Capital Advisors into a family office after settling with the SEC on insider trading charges. In the case, SAC Capital pleaded guilty to fraud charges and agreed to pay $1.8 billion to settle the matter.
Of note, Stevie Cohen’s net worth is at least $9 billion. According to knowledgeable sources, the name of Cohen’s new family office — Point 72 Asset Management — was taken from the address of SAC Capital at 72 Cummings Point Road.
Cohen apparently purchased the domain name Point72.com from Point72 Technologies so he could create the firm’s website. Point72’s website website first went live April last year, but only provides very basic information about the family firm.
The website of Point72 Asset Management notes it mainly invests in discretionary long/short equities along with quantitative and macro investments. Of interest, the firm has offices in New York, Hong Kong, Tokyo and Singapore, with over 850 employees (350 investment professionals).
The filing states:
…. alleges that Respondent failed reasonably to supervise two senior employees-Mathew Martoma and Michael Steinberg-who engaged in insider trading. After the Commission instituted this proceeding, federal juries found Martoma and Steinberg guilty of securities fraud and conspiracy to commit securities fraud for insider trading. Both I Steinberg and Martoma appealed.
The Division intends to file a motion with the Court to amend the OIP because the Division no longer bases its claim against Respondent on Respondent’s failure to supervise Steinberg. At the hearing, the Division still intends tol I offer evidence concerning Responqent’s supervision of Steinberg to prove Respondent’s liability for failing to supenise Ma.rtoma. and J., need for appropriate relief.