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A Short List Of Things Steve Cohen Really Doesn't Need Right Now

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  • 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

The Securities and Exchange Commission made a move today that suggests the government isn’t quite done investigating Steven Cohen’s giant hedge fund, SAC Capital, when it filed civil charges against another former employee for alleged insider trading. Ronald Dennis, a former analyst with SAC’s CR Intrinsic unit, was charged with trading in shares of Foundry Networks (BRCD) and Dell (DELL) in 2008 and 2009 based on inside information. The trades brought in $2.7 million in profits and avoided losses for SAC, according to the SEC. Dennis agreed to be barred from the securities industry and to pay $200,000 to settle the charges.

Oh, and that Steve is Portfolio Manager C, which is better than A, but nevertheless...

The SEC’s complaint lists a number of SAC employees with whom Dennis shared the information: “Portfolio Manager A,” whom Dennis worked for in 2008, and who, the SEC alleges, purchased 120,000 shares of Foundry stock for a CR Intrinsic portfolio after Dennis communicated intelligence he’d received from a company insider; “Portfolio Manager B,” whom Dennis started to report to in 2009 and who, along with Portfolio Manager A, traded Dell shares based on information Dennis received from an employee at Dell. Finally, there was “Portfolio Manager C,” at SAC Capital, who, the SEC alleges, earned profits of $1.1 million trading in Dell in August, 2009 after speaking with Portfolio Manager B, who had received information from Dennis.

According to people familiar with the matter, Portfolio Manager A is Alec Shutze, Dennis’s former boss at CR Intrinsic; Portfolio Manager B is Eric Gerster, who became Dennis’s boss after Shutze left the firm; and Portfolio Manager C is SAC founder Steven Cohen. Shutze could not be reached for comment. Gerster, reached Thursday afternoon, declined to comment. Cohen, through spokesman Jonathan Gasthalter, declined to comment.

Though, to be fair, it seems like SAC management had something of a hunch this was coming.

Gerster, according to a person familiar with the firm, became rattled after the arrest of Galleon Group co-founder Raj Rajaratnam in October 2009 and resigned from SAC shortly afterward, citing the stress that the high profile government investigation had caused him. Gerster sat for several hours of exit interviews that were referred to internally as a “deposition” with SAC’s lawyers at Willkie, Farr and Gallagher before he left the company, which was highly unusual, the person said.

Steven Cohen Identified in New Insider Trading Suit [BusinessWeek]


Things Could Be A LOT Better At SAC Capital Right Now

Back in October, we detailed a list of things that, if you are the hedge fund manager who goes by the name Steven A. Cohen, you really don't want to hear first thing in the morning. They included: “The fleeces are on back order”; “Your ex-wife is in the lobby”; “There’s a photographer here who said he’s been authorized to shoot you wearing a king’s robe and crown for a set of playing cards”; “You’ve been outmaneuvered for the Toledo Mud Hens. But I hear the Binghamton Mets may be available.” Today we must update that list to include another thing, perhaps THE thing,* that people delivering news to Cohen don't want to relay. Paraphrasing but any variants on: "Mr. Cohen, we've received a Wells notice and by the way, they're considering naming you personally."