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Things Could Be Worse But They Could Also Be Better At SAC Capital Right Now

The good news, if you are Mr. Steve Cohen: you were neither charged nor “mentioned by name” in the criminal complaint against your former employee, Mathew Martoma, who is alleged to have orchestrated “the most lucrative insider trading scheme ever.” The less good news: YOU ARE PORTFOLIO MANAGER A. YOU NEVER WANT TO BE PORTFOLIO MANAGER A!

U.S. officials for the first time Tuesday implicated Steven A. Cohen, the founder of SAC Capital Advisors LP, in an alleged insider-trading scheme they said was the most lucrative ever to be charged…Mr. Cohen…is referred to as “Portfolio Manager A” in an alleged $276 million insider-trading scheme in a civil complaint filed by the Securities and Exchange Commission, according to people familiar with the matter. Both civil and criminal complaints also refer to him as the “owner” of two hedge-fund affiliates involved in the alleged scheme, and depict him as integrally involved in the allegedly illicit transactions…According to the SEC complaint, Portfolio Manager A authorized many of the trades based on Mr. Martoma’s alleged inside information, and rejected the advice of other analysts at his firm that conflicted with Mr. Martoma’s positions. In particular, on July 20, 2008, after Mr. Martoma had learned negative information relating to two pharmaceutical stocks in which SAC and its affiliate had big positions, Mr. Martoma said it was “important” that he speak to Portfolio Manager A, and indicated he was no longer “comfortable” with their positions, according to the civil complaint.

The next day, Portfolio Manager A’s head trader began selling hundreds of millions of dollars of shares in the two companies, and the hedge funds later began executing negative bets against those two companies’ stocks, reaping big profits and saving large losses.

Steve Cohen Implicated In Insider Trading Scheme [WSJ]

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63 Responses to “Things Could Be Worse But They Could Also Be Better At SAC Capital Right Now”

  1. Guest says:

    10 bucks someone at the SEC is seen wearing a S.A.C fleece signed by A.Rod by weeks end…Takers?

  2. Steven A. Cohen says:

    fuck…

  3. Guest says:

    No mention of Little Cat A, B, or C?

    –Guy who just read The Cat in the Hat Comes Back to his kid

  4. Guest says:

    This is a terrible tragedy. Investors were fleeced.

  5. Guest says:

    Shamelessly copying the Drudge siren, I see, did you ask for his permission?

    – UBS Intellectual Property Quant

  6. Guest says:

    Please Matt, do us some charts and some CFA level II analyses on this P&L:

    Economic Inputs

    1- No Bonus in 2009, base pay $250k
    2- $9.38mm Bonus in 2010, base pay $250k
    3- Lawyers fee for a plea- $250k
    4- SEC penalty- $5mm
    5- 18 months in mimimum security lock-up- loss of 18 months income, -$60k
    6- Taxi driving until retirement- 27 years x $50k, $1.35mm

    What is the Expected Value of insider Trading?

  7. Guest says:

    Seriously folks. What if they go after Cohen? What happens to his portfolio? Does he close shop? Is there reputational damage if he's practically the only investor in his fund?

    • Guest says:

      SAC needs to merge with Rochdale to survive

    • Adding it Up says:

      "What if they go after Cohen?"

      Current Steven A. Cohen Net Worth: +/- $1 bil
      Less: legal fees re: first wife, SEC settlement, buying all copies of "that" deck of cards": $100 mil
      Net Steven A. Cohen Net Worth: +/- $800 mil

      Sure, ban him from the securities industry – he will just grow MORE powerful, allocating money to his favored new PMs – HE CANNOT BE STOPPED!

  8. Louis Bacon says:

    what a sac of lies and deceit

  9. Guest says:

    Best thing for him is to come down with Alzheimer's at this point….

  10. Guest says:

    Green dot or Red dot on Bloomberg?

  11. Guest says:

    I'm sorry Bess. I know you must be taking this news harder than anyone.

  12. Guest says:

    *WHEW*

    – Portfolio Manager B

  13. IANAL says:

    "obviously no one knows except you me and [HF Owner]"

    Looks real bad, Stevie boy.

  14. Eliot Ness says:

    Maybe SAC will be seen wearing Presidential cufflinks in the not too distant future.

  15. _guest says:

    "Whew."

    -J. Corzine

  16. Jim Lahey says:

    Maybe McAfee can help by sending an instruction manual for his cardboard escape pod 5000?

  17. Marlboro Prangdune says:

    Cherry top flashing grand mal seizures, commence.

  18. Sack Lunch says:

    Better sell the shark.

  19. Portfolio Manager X says:

    What an amateur.

  20. PermaGuestII says:

    brack·et

    verb (used with object)

    (Gunnery) To place (shots) both beyond and short of a target.

  21. C. Moose says:

    We have caught the sniper like a duck in a noose. Say it, duck in a noose.

  22. JJ says:

    9,10,11,12

    chimp city

  23. jj jones says:

    9 , 10 , 11, 12

    chimp city

  24. January 28, 2011 says:

    "Mark Haines at CNBC for example, says someone from the network tried to talk to him.
    Cohen told them, "You don't need to be talking to me. I'm on the way down."

    Any thoughts about what that means?"

    Read more: http://articles.businessinsider.com/2011-01-28/wa

  25. Miami says:

    I'm so sick of hearing about SAC. I've got a much more interesting story: Back when Dan Dorfman was on CNBC, SOROS used to coerce him into moving stocks in his direction by sending child prostitutes to his house while having it videotaped so he could use it against him. There's some inside information for ya.

  26. Rick says:

    I am also sick of this

    How much is the sec spending on this witch hunt? What about the millions of money laundering small businesses and welfare cheats? what about the criminal federal reserve stealing from savers?

    a message to the Obama communist government – fk off already scapegoating wall street for votes

  27. Stevie says:

    Shark for sale, comes with tank full of formaldehyde. Cash bids only. Must move quickly as I plan to be relocating soon. Don't tell my ex-wife.

    Contact: Stevie@sac.com

  28. Dougie says:

    Well Stevie, now we know how you feed your family…

  29. EQ in Dallas says:

    I look into my crystal ball and see a rapidly rising public prosecutor that will be a future client number 10.

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