Steven A. Cohen is poised to make a return to the hedge-fund industry by 2018 under an accord with U.S. regulators that settles allegations that the billionaire failed to supervise a convicted insider-trader at SAC Capital Advisors.
Steven A. Cohen is poised to make a return to the hedge-fund industry by 2018 under an accord with U.S. regulators that settles allegations that the billionaire failed to supervise a convicted insider-trader at SAC Capital Advisors LLC.
The settlement requires that the family office Mr. Cohen now runs, Point72 Asset Management LP, undergo routine inspections by the Securities and Exchange Commission, the regulator said in a statement Friday. Mr. Cohen neither admitted nor denied the SEC's claims that he failed to monitor Mathew Martoma, according to the statement.
Before handling outside money again, Mr. Cohen will need to have an independent consultant ensure that he has sufficient safeguards to detect and deter insider trading.
“The strong combination of a two-year supervisory bar and additional oversight requirements achieves significant and immediate investor protection and deterrence, while ensuring that the activities of his funds are closely monitored going forward,” SEC enforcement chief Andrew J. Ceresney said in the agency's statement.
The prospect of a Mr. Cohen comeback follows a decision by the SEC to weaken its case against him. An initial action also accused Mr. Cohen of failing to supervise former SAC fund manager Michael Steinberg. The SEC removed Mr. Steinberg from the case after U.S. prosecutors dropped charges against him in October following a court ruling that imposed a higher burden on the government to make insider-trading convictions stick.
Point72 spokesman Mark Herr declined to comment on Mr. Cohen's settlement with the SEC.
When the SEC first sued Mr. Cohen in July 2013, he returned money to outside investors and transformed SAC into Point72. At the time, SEC enforcement officials sought a lifetime ban on Mr. Cohen managing client assets, people familiar said.
A lengthy suspension for Mr. Cohen became less likely after a dozen insider-trading convictions were thrown out last year. To prove insider trading, prosecutors now must show a defendant knew that their tips came from someone who had a duty to keep the information secret and that the leaker got a benefit from passing it on, the U.S. Court of Appeals in New York said in December 2014.
