Billionaire Considers Shutting Hedge Fund Amid Investigation

by Christopher Freeburn | May 21, 2013 9:40 am

wrapup deal Billionaire Considers Shutting Hedge Fund Amid Investigation[1]Sources tell Bloomberg that hedge fund manager Steven Cohen is mulling a possible settlement with federal prosecutors[2].

Under the deal, Cohen would concede wrongdoing and pay a fine. He was also convert his SAC Capital Advisors hedge fund into a family-run firm solely managing his personal fortune, closing it to outside investors. In exchange, prosecutors would not pursue criminal charges for past infractions.

Federal regulators have identified nine current and past employees of SAC who are accused of conducting insider trading[3] while at the firm. The government, which has been investigating SAC for five years over insider trading allegations, has not yet charged either Cohen or SAC with criminal wrongdoing.

A legal expert expressed skepticism that the government would allow Cohen to escape prosecution, though such deals have become increasingly common.

Word that Cohen is contemplating such a settlement suggests that he doesn’t expect to win a protected court battle with the government.

In March, Cohen acquired Picasso’s Le Rêve from Las Vegas casino owner Steve Wynn[4] for $155 million.

Endnotes:
  1. [Image]: http://investorplace.com/wp-content/uploads/2010/12/wrapup-deal.jpg
  2. mulling a possible settlement with federal prosecutors: http://www.bloomberg.com/news/2013-05-20/sac-s-cohen-said-to-mull-deal-that-would-shut-hedge-fund.html
  3. accused of conducting insider trading: http://investorplace.com/2012/11/former-hedge-fund-manager-charged-with-insider-trading/
  4. from Las Vegas casino owner Steve Wynn: http://investorplace.com/2013/03/hedge-fund-manager-buys-155-million-picasso/

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