Articles Tagged with Steven Cohen

U.S. Senator Elizabeth Warren chastised the Securities and Exchange Commission for not barring billionaire Steven Cohen from starting a new hedge fund just months after the regulator scolded him for not properly overseeing an ex-employee convicted of securities fraud.

In 2013, Cohen’s SAC Capital consented to pay $1.8 million and pleaded guilty to fraud charges accusing the hedge fund of allowing insider trading to take place. It wasn’t until January of this year, however, that the SEC told Cohen that he was barred from managing the money of other people until 2018. Now, however, he is already involved in efforts to start Stamford Harbor Capital, a new hedge fund, of which he owns 25%.

Criticizing the SEC in a letter to its chairperson, Mary Jo White, Senator Warren said that Cohen’s application to start the new hedge fund, which the Commission approved, is just another example of the regulator’s enforcement actions failing to properly punish parties that are guilty, not protecting investors, and failing to impede future wrongdoing. It was just this January that Warren said that she believed that U.S. companies manage to commit crimes in part because of poor enforcement. She pointed to the SEC as an agency that often does not succeed in using the full scope of its enforcement powers.

In its case against Cohen, the SEC accused him of not properly supervising Mathew Martoma, who was convicted in of insider trading that allowed SAC to make gains and avoid losses of $276M. (Martoma is appealing his conviction.) While Cohen did not admit to wrongdoing when settling the SEC case, he did retain an independent consultant to ensure legal compliance.

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