Even though billionaire Steven Cohen has been barred from managing outside money, he may have found a way to have his cake and, well, nibble at it too.
The 59-year-old opened a new fund, Stamford Harbor Capital, based out of its namesake in Connecticut, which can accept outside money. Currently, the Wall Street titan runs a family office, Point72 Asset Management, which manages his personal and employees’ finances.
Back in 2013, Cohen’s highly successful hedge fund SAC Capital Advisors pled guilty to insider trading— agreeing to stop managing outsider money and pay $1.2 billion. Cohen, who was never directly connected with the insider trading, was charged with failing to supervise a portfolio manager involved in his case. In January, Cohen agreed not to supervise funds that manage outside money until 2018 as part of his settlement with the Securities and Exchange Commission.
Cohen, in line with his settlement, won’t act as a supervisor.
“Steven A. Cohen is associated with Stamford Harbor by way of his indirect ownership of Stamford Harbor, but Mr. Cohen will not act in a supervisory capacity with respect to Stamford Harbor,” the firm’s April 1 regulatory filing stated. Cohen owns the fund,which currently has no assets under management, through a holding company set up in March.
Opening a new fund just months after the settlement is something of a punch in the face to the SEC, according to Duke University law professor James Cox.
“This is consistent with other times where the SEC has just blinked when stared down,” he told the Wall Street Journal. “I’m completely dumbfounded.”
Cohen also specifically negotiated the terms of his January settlement so that he could set up a firm like Stamford.
According to regulatory filings, the nascent fund has 15 employees, five of which are in a investment advisory position. Several of Point72’s upper echelon have also been named as executive officers. Chief Operating Officer Timothy Shaughnessy, Chief of Strategy Michael Zea, President Douglas Haynes, General Counsel Kevin O’Connor, and Chief Compliance Officer Tortorella.
The firm will likely also have to hire an independent consultant and agree to on-site SEC examinations.