SEC files feeble action against Steven Cohen

After years of investigating the hedge-fund founder, the most regulators can come up with is that he's a bad boss.

By Kim Peterson Jul 19, 2013 3:48PM
Hedge fund manager Steven A. Cohen (© Steve Marcus/Reuters)Federal regulators have been circling billionaire hedge-fund manager Steven Cohen (pictured) for years, and on Friday they finally filed a civil action against him. But that action is shockingly feeble: He's in trouble for being a bad boss.

The Securities and Exchange Commission accused Cohen of "failing to supervise" employees. And while The New York Times calls it a "serious blow," it's hard to see this as very damaging.

The billionaire has so much money that this year alone he has dropped $23 million on a West Village condo, $155 million on a Picasso and $60 million on a Long Island oceanfront mansion.

Now, if the SEC gets its way, Cohen may be barred from overseeing investor funds. It's hard to imagine Cohen shedding a tear over that.

This seems like a slap on the wrist for Cohen personally after the company he founded, SAC Capital Advisors, paid $616 million to settle insider-trading charges with the SEC without admitting any wrongdoing. Regulators didn't charge Cohen with fraud or anything criminal.

Instead, he's getting painted as an ignorant boss who didn't keep his workers in line.

Twitter users were less than impressed with the SEC's prowess here. "Breaking: SEC charges Steve Cohen with poor penmanship, posture," wrote one. "After all that, Steve Cohen gets accused of 'failing to oversee?' Clear who won that one," wrote Business Insider's Henry Blodget. "SEC to force Steve Cohen to retire to his 40-acre mansion, pay fines that cost less than his lunch," wrote another user.

The government has long suspected insider trading at SAC, and has already charged two of Cohen's employees with illegally trading pharmaceutical and technology stocks, The Washington Post reports. But the SEC has never been able to get Cohen.

Instead, investigators said Friday that Cohen failed to follow up after learning about red flags showing his employees may have been trading illegally.

So Cohen, who at age 57 is the 35th richest person in the U.S., may be banned from overseeing investor funds. But this issue is a long way from being resolved: SAC says in a statement that Cohen will fight the charge.

More on moneyNOW



7Comments
Jul 19, 2013 4:53PM
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christopher cox disembowled the sec and mary schapiro did nothing to change that. maybe mary jo white can begin to restore the sec, but don't hold your breath. she will beat up a couple of little people to create fear, but the sec is a toothless tiger in its current state
Jul 19, 2013 5:20PM
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This arrogant greed is criminal and just plain disgusting!!!
Jul 19, 2013 6:32PM
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Look at him folks. Next time you ask, "who's manipulating the market?" Think of that pumpkin headed dork's ugly mug.
Jul 19, 2013 4:03PM
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All they have to do is get one of his "minions" to roll over on him.  While he buys them off the Prosecutors will do like Mob cases and go after a soft target like someone's family.  This will play out like a chess game.
Jul 19, 2013 4:40PM
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look like the rich got distorted with those mansion buying.
Jul 19, 2013 7:23PM
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Pathetic.  All the bankers walked after 2009 too.  Pathetic.
Jul 19, 2013 5:54PM
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WHEN ARE THEY GONNA ARREST BARNEY FARTY FRANK AND DOODY DODD FOR THEIR BS

MISERABLE BILL THAT HAS MADE THINGS WORSE? OR FANNIE MAY FREDDIE MAC?

OR DEMOCRATS FOR BUYING STOCK IN HEALTHCARE COMPANIES THEN NOT READING

THE BILL BUT PASSING IT ANYWAY? ISN'T THAT FRAUD? OR OBAMA AND DEMOS FOR

THE FRAUD OF STIMULUS? WHERE'S THE SOYLANDRA AND STIMULUS MONEY NOW?

IN BIG UNIONS AND DEMOS AND FRIENDS AND FAMILY AND PROGRESSIVE GROUPS

POCKETS! THAT'S FRAUD! WHERE IS OUR SS AND MEDICAID MONEY? THEY TOOK IT

AND SPENT IT ON OTHER THINGS! THAT'S FRAUD! THE ENTIRE SYSTEM IS CORRUPT!

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