Financier Steven A. Cohen Is Barred From Supervising Funds
The hedge fund manager Steven A. Cohen has agreed to a two-year ban from supervising funds that manage outside money, to resolve U.S. Securities and Exchange Commission charges that he failed to supervise a former portfolio manager convicted of insider trading.
The SEC on Friday also said Cohen agreed to retain an independent consultant to review activity at his firm Point72 Asset Management, which invests the billionaire’s fortune, and that the firm will be subject to examinations by the regulator.
Cohen did not admit or deny the SEC’s findings that he failed to properly oversee Mathew Martoma, who was convicted of insider trading over trades he made in 2008 at the CR Intrinsic unit of SAC Capital Advisors LLC, as Point72 was once known.
“The strong combination of a two-year supervisory bar and additional oversight requirements achieves significant and immediate investor protection and deterrence, while ensuring that the activities of his funds are closely monitored going forward,” Andrew Ceresney, head of the SEC enforcement division, said in a statement, referring to Cohen.
In a memo to Point72 employees obtained by Reuters, Cohen said he expects to be able to manage outside money effective Jan. 1, 2018 provided that he complies with the settlement, though that “does not necessarily mean” he will do so.
“Inevitably, some will ask why I agreed to settle,” Cohen wrote. “The longer the pending litigation lingered, the more it distracted from the world-class Firm that we are building. Resolving the case gives us certainty and opens a path to raising outside capital in the future if we believe that is in best interest of the Firm.”
SAC pleaded guilty to fraud in 2013 connection with charges related to insider trading by its employees, and paid $1.8 billion in criminal and civil settlements with U.S. authorities. Cohen was not criminally charged.