But SAC also took steps to keep employees on board in the firm’s new incarnation by sweetening its compensation plan for this year, the people said. Under the new terms, employees who stay through 2014 will be subject to more-relaxed rules about pay that is deferred until later years…SAC typically has held back a quarter of employees’ pay each year, investing it in the firm for the next three years and paying out that 25%, plus any investment gains, over the course of three years, according to people with knowledge of the matter. Under SAC’s old plan, employees choosing to leave the firm would forfeit any deferred compensation that had not vested. For this year, SAC said employees’ deferred compensation would vest immediately instead of over three years, though they still will be paid out over three years, the people said. That means that, even if employees were to leave SAC in January, they would be entitled to collect all the money owed them. [WSJ]
Area Hedge Fund Manager: SAC Capital Employees May Not Have To Change Their Names, Don Glasses With Fake Noses And Mustaches, Scrub The SAC Out In Order To Obtain EmploymentBy Bess Levin
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 »
Wanted: Former Prosecutor To Help Prevent Future Prosecutions Of Whatever SAC Capital Is Gonna Be Called As Of AprilBy Bess Levin
Steven A. Cohen, the billionaire investor, is looking to hire a former prosecutor or securities regulator to monitor trading at his investment firm in the wake of the federal government’s insider trading investigation. Mr. Cohen’s SAC Capital Advisors hedge fund, which pleaded guilty to securities fraud in November, is in the process of converting to a family office that will manage mainly $9 billion of his personal wealth. The firm announced its intention to hire a chief surveillance officer to monitor trading in a letter to employees on Tuesday. The firm expects to fill the newly created position in the spring…The letter to employees also described how SAC, after converting to a family office, would consolidate several operating divisions and would announce a new name for the firm sometime in April. [Dealbook]
At least one person isn’t happy about the pending insider trading settlement between the government and SAC Capital Advisors LP and isn’t afraid to make that known — anonymously. In an anonymous email to U.S. District Judge Laura Taylor Swain, who is presiding over the criminal portion of SAC’s settlement, the critic had harsh words for the Justice Department and SAC’s billionaire founder Steven A. Cohen. “LTS, you must be tough like [Judge] Rakoff, kill the plea deal now that SAC trader Mathew Martoma is convicted to force DoJ to put Steve Cohen behind bars,” the person wrote. “His billions were made by insider trading and stolen from investors.” [WSJ]
*Assuming you can’t get them imported to the joint.
he's gonna blow!
Over at Dealbook today you will find an article by Matthew Goldstein and Alexandra Stevenson that takes stock of the government’s futile attempts to ensnare hedge fund manager Steve Cohen, in the wake of last week’s guilty verdict against one of his former traders, Mathew Martoma. According to Martoma’s attorney, his client was but a pawn/grain of sand in the Feds’ quest to nail Cohen for insider trading. While the conviction of Martoma was a win for Preet Bharara and Co in that it brought their record against accused insider traders to 79-0, things didn’t turn out precisely as they had hoped, as Martoma never turned on Cohen by revealing the damning details of a crucial 20 minute conversation the two had over the phone, before SAC began dumping its shares of Elan and Wyeth.
Will Martoma ultimately turn on Cohen in an effort to receive a more lenient sentence? It’s possible, though somewhat unlikely, as 1) He hasn’t up to this point and 2) His “testimony is not worth much to prosecutors now unless he has some email document, or other piece of physical evidence to support any version he would present of his conversation with Mr. Cohen. Plus, the revelations that he attached fake Harvard Law transcripts to his applications for prestigious clerkships did not exactly do wonders for his credibility. Obviously this is good news for Cohen, and adding to the ‘everything is coming up roses for the Big Guy’ column is the fact that, amazingly, people supposedly “still want to work [at SAC.]”
Which brings us to the most important part of Goldstein and Stevenson’s piece: the window it give us into one of the more vital and consequential tasks SAC employees find themselves performing daily: Read more »
Jurors in Manhattan have reached a guilty verdict in the insider-trading trial of Mathew Martoma, the former SAC Capital Advisors LP portfolio manager accused of insider trading. The jury said Martoma used inside tips on trades that earned SAC $275 million. [WSJ, earlier]
Defense: Mathew Martoma But A Victim/Pawn/Grain of Sand/Innocent Young Man Cut Down In The Prime Of His Totally Legit Trading Career In Government’s Quest For Steve CohenBy Bess Levin
Former SAC Capital Advisors LP fund manager Mathew Martoma was portrayed by his lawyer as the victim of a “rush to judgment” by prosecutors looking to use him to bring insider-trading charges against his former boss, Steven A. Cohen…“Mathew was just a grain of sand in their haste to make a case against someone who is not even in this courtroom: Mathew’s boss, Steven Cohen,” Richard Strassberg said in his closing argument yesterday in Manhattan federal court. [Bloomberg]