In the end, billionaire Steven Cohen, one of the most successful hedge-fund managers of his generation, could end up getting banned from the business he dominated for an error of omission, not commission.
Former SAC Capital Advisors LP fund manager Mathew Martoma, on trial for insider trading, lost a bid to show jurors what founder Steven Cohen told regulators about the sale of Wyeth stock at the center of the case -- statements he argues exonerate him.
Steven Cohen, who agreed to close down his SAC Capital Advisors LP as part of a settlement with the U.S. government, will rename the firm and add a layer of management to oversee traders as the hedge fund becomes a family office, said a person familiar with the firm.
Mathew Martoma may have the one thing prosecutors have been unable to find in their probe of SAC Capital Advisors LP: a direct link between founder Steven Cohen and insider trading. Having refused to cooperate, Martoma now faces trial for what the government claims was the biggest illegal trade in U.S. history.
The biggest insider case ever, an alleged $276 million fraud that has led prosecutors and securities regulators to the inner-circle of SAC Capital Advisors LP’s Steven Cohen, stemmed in part from a referral from the Financial Industry Regulatory Authority.