Cohen: Fairfax Financial Still Suing Short Sellers, Still Up to Shennanigans

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Steve Cohen has said numerous times that Fairfax Financial is up to some unsavory stuff in its neverending lawsuit against every hedge fund shorting the Canadian insurer's stock in 2009. You might think that convincing his ex-wife to sue him for control of SAC Capital was bad enough, but an even shadier stunt: Fairfax supposedly paid investigators to pretend to be hedge fund managers looking for some inside information from SAC's co-defendants while their lawyers weren't looking.

SAC Capital joined a motion brought by Morgan Keegan & Co. to kick Kasowitz Benson Torres & Friedman LLP off the suit because its investigators posed as managing directors of a sham hedge fund and contacted John Gwynn, then a Morgan Keegan analyst, even after the suit was filed and Gwynn had a lawyer.

Apparently the investigators "told Morgan Keegan and Gwynn that the sham fund, Blackwood Group Capital Partners, was backed by a wealthy family and that they wanted to talk to an analyst about investing in the insurance sector," trying to get him to give them inside information. He didn't bite, although Morgan Keegan did fire him for giving inside information to other investors. Later, he died. And still this case goes on - and presumably will go on even longer if Fairfax has to hire new lawyers and start over.

SAC Capital Seeks to Disqualify Kasowitz Benson Law Firm in Fairfax Suit

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As you may have heard, the last number of months have been a bit tough on hedge fund manager Steve Cohen. In November, one of his former employees, Mathew Martoma, was accused of orchestrating "the most lucrative insider trading scheme ever," in a criminal complaint in which Cohen was referenced as Portfolio Manager A. A week later, the Times lopped 21,000 square feet off his house. Earlier this month, he had the pleasure of setting the record for the largest insider trading fine ever, at $614 million, a sum that does not even put this whole thing behind him, as the settlement "doesn't preclude the Securities and Exchange Commission from pursuing Cohen himself in the future." So you'll excuse the Big Guy if he felt the need to indulge in a little retail therapy recently.