Washington, D.C., March 15, 2013 — The Securities and Exchange Commission today announced that Stamford, Conn.-based hedge fund advisory firm CR Intrinsic Investors has agreed to pay more than $600 million to settle SEC charges that it participated in an insider trading scheme involving a clinical trial for an Alzheimer’s drug being jointly developed by two pharmaceutical companies…
That’s the largest insider trading settlement ever. And is more than Goldman paid to settle Abacus. Read more
US prosecutors are examining trades made in an account overseen by hedge-fund titan Steven Cohen that were suggested by two of his former fund managers who have pleaded guilty to insider trading, reports the WSJ. The development surfaced in court filings submitted in connection with a sweeping insider-trading probe.. At issue is trading in a $3bn stock portfolio personally overseen Cohen at SAC Capital Advisors and referred to by the government in the filings as the “Cohen Account” and internally at SAC as “The Big Book.” SAC portfolio managers gave their best trading ideas to Cohen for this account and were paid a bonus if they generated big returns for him, say people close to the matter. As part of the broad probe, the US is examining trades in the Cohen Account suggested by two former portfolio managers, Noah Freeman and Donald Longueuil; both have pleaded guilty to securities-fraud charges for trading on inside information. Read more
The insider trading investigations continue — and move beyond expert networks. From the FT on Tuesday:
Federal prosecutors have charged three hedge fund portfolio managers and a hedge fund analyst with insider trading. Read more
Steve Cohen, head of the $12bn SAC Capital hedge fund, has assured his investors that they will suffer “no financial impact” as a result of a wide-ranging federal probe into insider trading on Wall Street, reports the FT. SAC, based in Stamford, Connecticut, has been subpoenaed along with several other hedge funds and mutual funds as part of the investigation by Preet Bharara, the US attorney in Manhattan. Neither SAC nor any of its employees have been accused of wrongdoing. Cohen said in a year-end letter to investors sent on Jan 31 that they would not suffer losses relating to the probe and that the management company would bear any resulting expense. Read more
We watched the video, so you don’t have to…
Vanity Fair promo: Read more
SAC Capital, the secretive $16bn (£10bn) hedge fund group run by Steve Cohen, has invested in a new London-based fund run by one of its former star traders. RWC Partners’ new US Absolute Alpha fund, run by Mike Corcell, is expected to launch on Thursday. The fund has raised $350m – making it one of the largest UK launches to date. Investors are expected to commit a further $200m over the next few months. Corcell joined RWC in June, having previously run a large portfolio at SAC. Read more
Cosmos Bank, Taiwan’s largest issuer of cash cards, edged closer to completing its recapitalisation on Wednesday as more than 93% of bondholders agreed to exchange T$12.4bn ($382m) in debt for an 11% equity stake. The agreements come as the bank awaits $900m in funds from SAC Capital, the private equity arm of the US hedge fund group, and GE Money, a finance business of GE, which agreed in September to jointly buy an 80% stake. Cosmos is one of several smaller Taiwanese banks caught in a crisis in unsecured consumer lending last year. As a result, the government has taken over numerous insolvent lenders and auctioned off part of their assets. Two other lenders, Entie Bank and Ta Chong Bank, sold stakes to Longreach Group and Carlyle Group, respectively. Read more
Salacious allegations concerning traders at first rank hedge fund SAC Capital have begun to emerge from a Manhattan court hearing, with one employee claiming he was forced by his boss to take female hormones – and also wear articles of women’s clothing – to take the edge off his aggressive male attitude.
The hormones were supposed to make the trader more “detail orientated,” but it has yet to be explained while SAC didn’t simply hire more women. Read more
SAC Capital raised $1bn last week when the US hedge fund briefly began accepting investor money, underscoring healthy demand for the most successful funds even during difficult times. SAC, a $14bn manager run by billionaire art collector and founder Steven Cohen, pulled in the money for its flagship $7bn fund despite a poor August, when investors said it was down 3 per cent. It remained up 10 per cent for the year. The fundraising highlights the appeal of the top hedge funds for investors, although some investors said smaller funds might suffer as a result. Read more
In case you missed it:
Taiwan’s Cosmos to sell SAC, GE $900m stake
Cosmos Bank, the Taiwanese lender, narrowly avoided a takeover by the government on Friday by agreeing to sell a controlling stake to SAC Capital, a US hedge fund group, and GE Money at a steep discount.
Barclays puts $1.4bn into Cairn fund
Barclays on Friday threw a $1.4bn lifeline to a troubled debt vehicle it created for Cairn Capital, the London-based hedge fund, and suggested it was considering similar moves for others. Read more
SAC Capital, the $14bn hedge fund run by billionaire Steven Cohen, is considering selling up to 20 per cent of itself to private minority investors. Mr Cohen is known as one of the world’s most successful – and secretive – hedge fund managers. SAC’s assets under management are thought to include about $7bn of Mr Cohen’s money. More recently, Mr Cohen has moved into activism, building stakes in companies such as Bausch & Lomb and TD Ameritrade. SAC has been marketing possible stakes in its management company to investors including Singapore’s Temasek. Lehman Brothers is said to be working on the sales. Read more
The hedge fund world isn’t famous for its transparency, but some funds are more mysterious than others. Hedge Fund Reader lists the 25 names that out-intrigue, out-conspire and out-enigma the rest. Eye-catching entries (with their rankings and descriptions by Hedge Fund Reader) include:
1. SAC Capital Partners: “Secrecy may be Steve Cohen’s middle name but that didn’t stop his hedge fund from being embroiled in controversy over the Fairfax Financial Holdings affair…The “new prince of Wall Street” and the “hedge fund king” are sobriquets that lie lightly on Cohen’s shoulders — all he’s interested in is ruling his kingdom with an iron (secretive) fist.” Read more
KKR on Sunday night teamed up with a consortium including banks and hedge funds to buy Laureate Education, the Baltimore-based university group, in a $3.8bn deal.
The deal, clinched at $60.50 per share, or nearly 20 per cent higher than Laureate’s value over the last month, is the latest in a string of management buy-outs in the US. Read more
A good year for SAC and Citadel but not so much for Goldman Sachs. Bloomberg reports that the hedge funds run by Steve Cohen and Ken Griffin gained more than 30 per cent in 2006, but Goldman’s flagship fund declined for the first time in seven years.
Goldman may have retained its top spot in the global M&A rankings in last year’s boom for deal-making, and scooped a host of headline honours at the IFR awards in London last week, but its Global Alpha Fund ended the year with a 6 per cent loss. In contrast, SAC Capital delivered a return of 34 per cent and Citadel also topped 30 per cent, says Bloomberg citing investors in those funds. Citadel was helped by the natural gas positions that it took over when fellow hedge fund Amaranth collapsed last year. Read more
Casino billionaire Steve Wynn did $54m of damage when he put his elbow through a Picasso he was about to sell to Steven Cohen of SAC Capital Advisors, according to Bloomberg, via Albourne Village.
That’s the claim Mr Wynn has lodged with Lloyd’s of London, which the chairman of gaming group Wynn Resorts is now suing. Read more