SEC files civil charges against hedge manager
7/19/2013WASHINGTON — The Securities and Exchange Commission leveled its most direct shot against billionaire hedge-fund manager Steven A. Cohen on Friday by filing civil charges that accuse him of failing to prevent insider trading.
The SEC alleged that Mr. Cohen, who founded and runs SAC Capital Advisors, failed to prevent two of his portfolio managers from illegally reaping profits and avoiding losses of more than $275 million. Both managers provided information to Mr. Cohen in 2008 that suggested they had access to inside information, the SEC said. But rather than raise any red flags, Mr. Cohen praised one of the managers and rewarded the other with a $9 million bonus, the SEC said.
Mr. Cohen, 57, faces possible fines and could be barred from managing investor funds. His firm, which once managed more than $15 billion in assets, is at the center of one of the biggest insider-trading fraud cases in history. Four employees have already been criminally charged with insider trading — two of whom have pleaded guilty.