SAC Capital Advisors plans to shut down its London office as the $14 billion hedge fund firm founded by Steven A. Cohen scales back in the face of insider-trading allegations by U.S. prosecutors.
SAC will close down the U.K. office by the end of the year, President Tom Conheeney wrote in a memo sent to employees Tuesday. SAC employs more than 50 people in London, according to a person with direct knowledge of the matter. The firm this week cut six investment professionals in the U.S., Mr. Conheeney wrote.
“As our negotiations with the government have unfolded, it has become clear to us that the outcome the government is demanding is likely to have a greater-than-first-anticipated impact on the firm,” he wrote. “We have concluded that we must operate as a simpler firm and reduce our capital allocations.”
Money managers have been leaving SAC's U.K. office after a U.S. grand jury indicted the firm in July on allegations that it engaged in unprecedented illegal trading for more than a decade, prompting clients to pull almost all outside cash. Cohen, whose 21-year-old firm is negotiating a settlement with the government, is likely to be barred from managing other people's money and pay a fine of $1.8 billion, people familiar with the matter said this month.
Jonathan Gasthalter, a spokesman for SAC, wasn't immediately available to comment on the closing of the London office and the U.S. job cuts.