In Insider Trading Settlement, Steven Cohen Will Be Free to Manage Outside Money in 2 Years
Source: New York Times
The long investigation of Steven A. Cohen may finally have come to an end with a settlement that will bar the billionaire investor from managing money for outside investors for the next two years.
The settlement is likely to be seen as a victory for Mr. Cohen, one of the most successful stock traders on Wall Street, who was facing the prospect of a lifetime ban from managing outside money.
“Resolving the case gives us certainty and opens the path to raising outside capital,” Mr. Cohen wrote in a memo to employees.
The settlement, announced on Friday, heads off a showdown with the Securities and Exchange Commission before an administrative law judge. The S.E.C. had accused Mr. Cohen, 59, of failing to properly supervise Mathew Martoma, a former trader at Mr. Cohen’s former hedge fund who was convicted of insider trading
The S.E.C. settlement order is striking for its strong words about Mr. Cohen. The agency blamed him for ignoring red flags that should have prompted Mr. Cohen to question whether Mr. Martoma was engaging in insider trading.
If Mr. Cohen seeks to manage money for outside investors beginning in 2018, the settlement requires him to obtain an independent consultant through the end of 2019. Even before then, his family office will be subject to periodic examinations by the S.E.C. and must retain an independent consultant to monitor its activities
Read more: http://www.nytimes.com/2016/01/09/business/dealbook/sec-and-steven-cohen-reach-settlement-in-insider-trading-case.html?ref=business
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