You Can Take Away Steven A. Cohen's Ability To Manage Outside Money But You'll Never Take Away His Giant Balloon Inflation Party


Earlier today, SAC Capital pleaded guilty to insider trading, agreeing to pay $1.8 billion, the largest fine ever, for such a crime. While the settlement presumably gave some level of comfort to Cohen, who it is unlikely will face jail time, uncertainty about the future still plagues the hedge fund and its founder.

In addition to legal issues that may still rear their heads, the changes that SAC will undergo as a result of the deal with the government has likely given rise to new anxieties for staff, clients, and the community. Employees are wondering just how safe their jobs are, now that the fund will go from managing $15 billion to a mere $9 billion. #1 Fan Ed Butowsky is scrambling to find a sister or a cousin of Cohen's who he can marry as a means of becoming an investor in the family fund.

But for the greater SAC Family, the worries are much more urgent.

As those of you with a cursory knowledge of SAC Capital are aware, each year since at least 2009, the firm has sponsored an event called the Giant Balloon Inflation Party. Members of the Stamford community gather downtown the Saturday before Thanksgiving, and the night before the UBS Parade Spectacular, and watch with wonderment and delight as "giant helium balloons come to life." It's a spectacle so grand that Cohen himself not only foots the majority of the bill but has been known to attend, too, just awestruck as the children seeing it for the first time.

But with today's settlement, and the changes afoot at SAC, the question was clearly on everyone's mind: what would become of the giant balloons that needed inflating? Would SAC cancel its check, deciding it could no longer afford to fund such things? Would a representative from the firm be dispatched to blow them up manually? Would Cohen deem it simply too awkward to lend SAC's name to the party, given the events of the prior weeks? Would the government include a clause in the settlement forbidding SAC from taking part in "celebratory gatherings of 26 or more people at which cotton candy is provided, without written permission from Preet Bharara"? It all seemed so frighteningly possible.

But those fears were alleviated late Monday afternoon, when it became clear that what could have been the biggest tragedy of the whole settlement - the worst-case scenario of the storm - never materialized. We reached out to inflation party organizers, and according to Stamford Downtown president, Sandy Goldstein:

"SAC Capital continues to be an extraordinary member of this community and is happily aboard as the presenting sponsor of the balloon inflation party."

SAC Capital Advisors Giant Balloon Inflation Party [Stamford Downtown]
SAC Capital to Pay $1.8 Billion, the Largest Insider Trading Fine Ever [BusinessWeek]


Art World's Reactions To Steve Cohen Woes Range From "I'm going to begging for change outside the Staples Center" To "NBD"

Time was, Steve Cohen told the Feds where they could go. No matter how much heat they put on him, the Big Guy would not burn. If they wanted to relentlessly circle him in an attempt to find evidence of insider trading, that was fine by Steve. But he wasn't going to act like he gave a rat's ass and he certainly wasn't going to wilt under the scrutiny or draw the blinds at Casa Cohen and curl up in a ball to cry. This time two years ago, despite SAC receiving a subpoena from the government, the FBI raiding the firms of several former SAC employees, and an analyst being asked to wear a wire while chatting him up, Cohen not only hopped on a private plane to attend Art Basel, but he did so with a smile on his face. ("Cohen," the Journal reported, was in "jovial spirits and eager to chat about his fresh art acquisitions," which included a "large-scale map of the world made from tin cans" that he bought in the first five minutes of the fair opening.)  And while one could argue that the heat on Steve has been cranked up quite a bit more since then, we assumed he was dealing with it in typical Steve fashion, and would make it to Miami like always. So it was particularly troubling to hear this: