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SAC Capital, the $14bn hedge fund run by Steve Cohen, has quietly ended the practice of investing in hedge funds started by former employees, the FT says, citing people close to the firm. The decision, made in 2008 but not disclosed until now, is one of several changes SAC has made in recent years to shore up its reputation as it has come under scrutiny for potential insider trading, these people say. These changes also include scaling back Mr Cohen’s direct contacts with company officials and Wall Street analysts and brokers. In addition, after a federal investigation began into expert networks, which connect industry insiders to investors, SAC in 2007 barred its employees from talking to a consultant who had worked at a public company in the previous six months.
A US senator is investigating about 20 instances of suspicious trading by SAC Capital, the hedge fund run by billionaire Steve Cohen, amid a recent crackdown on insider trading, the FT reports. Charles Grassley, a Republican from Iowa and the senior member of the Senate Judiciary Committee, previously had pressed the Financial Industry Regulatory Authority for information on “the potential scope of suspicious trading activity at SAC Capital.” In a letter sent on April 26, Mr Grassley asked Richard Ketchum, Finra chairman, for details of all referrals related to SAC Capital sent to the brokerage regulator since January of 2000. Finra sent Mr Grassley information on about 20 suspicious instances of trading by SAC and SAC executives met with Mr Grassley’s staff earlier this month. 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 investigation into insider trading on Wall Street, the FT reports. SAC has been subpoenaed along with several other hedge funds. Cohen told his investors in the letter that they would not suffer losses, or incur costs related to the probe, with the management company instead bearing any expense. The potential damage to a fund from association with the investigation can be considerable. FrontPoint, a $7bn fund which has not been accused of wrongdoing, closed a $1.2bn healthcare fund after a portfolio manager was alleged to have received tips about a drug trial. 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