insider-trading

Over the past year or so, Steve Cohen has had to swallow several bitter pills in order to continue doing what he loves– trading stocks– and not further incite the Securities and Exchange Commission, the Justice Department, and Preet Bharara. He’s written a check for over 600 million dollars and another one for $1.2 billion. He’s returned all investor money to people not related to him by blood or marriage. He’s said good-bye to friends. Most recently, he made the ultimate sacrifice when he agreed to change the name of the firm1 from his initials to Point72 Asset Management, rendering a walk-in closet full of SAC Capital fleeces utterly useless.

And although the sight of a distraught Cohen fighting with his lieutenants over the name change, of him scooping up a pile of fleeces and shouting “What the hell am I supposed to do with these?!” before collapsing atop them and whispering, “Alright…alright,” of his President and GC and CFO standing awkwardly around him as he buried his face in the zip-ups and vests before sending everyone away and letting him be alone with them, of a single tear rolling down his face as he slowly traced the stitched on ‘S’ and then the ‘A’ and finally the ‘C’ should have been enough… Read more »

Apparently this came as a surprise to Rajat Gupta. Read more »

  • Calls from his guy at the Patagonia factory saying they’re backed up with orders right now the Point72 fleeces probably won’t get shipped ’til next Thursday
  • A message that his ex-wife was spotted on the property, and that she’s bypassed security and is heading for the trading floor
  • To be informed some little shit with a 12th birthday already rented the Super Duper Weenie truck for the weekend.
  • The news that yet another one of his employees was charged with insider trading

Read more »

Back in February, a young man named Mathew Martoma (né Ajai Mathew Thomas) was convicted of securities fraud. In addition to the actual act of using material non-public information about drug companies Elan and Wyeth to help out his employer, SAC Capital, in the P&L department, one thing that did not do wonders for Martoma’s case was the revelation that he had been expelled from Harvard Law School in 1999, as even he will tell you. For everything that Martoma is (a white collar criminal, an accomplished dancer), one thing he isn’t is stupid. That’s why when he was applying to Stanford University’s business school in 2001, he opted not to mention the incident at Harvard, probably figuring it would hurt his chances. One thing Martoma did not have the foresight to anticipate was that he would one day be a convicted felon, and, more importantly, that when it comes down to it? NOBODY MAKES A FOOL OF STANFORD. Which is this just happened:

Mathew Martoma, the SAC Capital Advisors LP employee found guilty last month of insider trading, is no longer a graduate of the Stanford Graduate School of Business, the school confirmed Tuesday. Administrators at the business school rescinded their offer of admission to Mr. Martoma, a move that nullifies the degree he earned in 2003, according to people familiar with the matter.

Of course, the university is not totally heartless: it gave Martoma a chance to explain, but evidently 4 weeks is not enough time to come up with a credible story. Read more »

1. He’s not convinced the government proved he committed securities fraud. 2. He feels pretty strongly that the revelation he created fake Harvard Law School transcripts that were accidentally sent to judges, with whom he was seeking prestigious clerkships, made him look bad. Read more »

For the ten SAC Capital employees who have been convicted of securities fraud over the last several years, the results of the government’s crackdown on insider trading are obvious: time in the big house, fines, and the dream of being being honored as a distinguished alumni of Stanford Business School dashed. For SAC founder Steve Cohen, too, the impact is clear: no more outside investors, a new layers of management– a cocoon, if you will– between him and his traders, and a giant metal ‘S’ ‘A’ and ‘C’, which once graced the wall of the firm’s lobby rendered completely useless.

For another group of people, though, the effect of multi-year investigation is less clear: the hundreds of SAC employees who did not engage in insider trading. Specifically, what having the hedge fund soon to formerly be known as SAC Capital on their resumés means for their professional lives and long-term career plans. Would it be the equivalent of a scarlet ‘S’ on their chests? Would hiring managers blow them off in a “seat’s taken” kind of way? Would they have to burn their fleeces and any other evidence of having once been associated with the firm? Would they stand in the shower scrubbing their skin raw in an attempt to get the SAC stench out, after a particularly unpleasant meeting with a potential employer who announced flatly that he could “still smell them on [you]“? Would they have to leave town, and start over in a place where no one had ever heard of SAC Capital? Read more »

From 2010 to 2014, when he was working in Evercore’s mining and metals group, Frank Perkins Hixon Jr. occasionally found himself on the receiving end of material non-public information. Sometimes it was about forthcoming acquisitions. Sometimes it was about his own company’s earnings. In both cases, FPH Jr. knew he could sweeten things for himself by trading on the 411. Naturally, he didn’t want to get fired from Evercore for securities fraud, as it would put a damper on his ability to obtain inside info, so he couldn’t be too obvious. Placing the trades in an account under his own name was obviously out. Same went for anyone with whom he shared a last name, like his mom or dad. And that’s when the lightbulb went off: Read more »