In late 2015, with Securities and Exchange Commission (SEC) disclosed it had reopened an administrative proceeding against SAC with a potential administrative trial date for this spring.
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Under the agreement, Cohen will not have to pay any penalties, nor did he admit or deny any of the SEC’s charges.
The SEC maintains that Cohen failed to supervise Mathew Martoma, another former trader who worked at SAC subsidiary CR Intrinsic Investors who was convicted of insider trading in shares of pharmaceutical companies, Elan Corporation and Wyeth.
Point72 spokesman Mark Herr declined to comment on Cohen’s settlement with the SEC.
The regulators originally sought to permanently bar Cohen from the financial industry.
Steven Cohen, Point72Hedge fund manager Steven Cohen will be prohibited from supervising funds that manage outside money until 2018, the US Securities and Exchange Commission (SEC) announced Friday.
The SEC said it will continue to examine Cohen’s firms, which will be required to conduct periodic reviews by an independent consultant to ensure compliance with securities laws.
SAC Capital Advisors which derived its name from Mr Cohen’s initials, changed its name to Point72 Asset Management in 2014. Cohen avoided criminal prosecution even as his firm was charged by the Justice Department.
Cohen, who lives on a sprawling estate in Greenwich, Connecticut, is one of the highest-profile figures in American finance and one of the country’s richest men.
Cohen reached a settlement with regulators that clears him to return to managing out side money in two years, a remarkable turnaround for the Wall Street veteran after years of legal fights. The settlement terms also provide that if Cohen becomes associated in a supervisory capacity with an entity that is a registered broker, dealer, or investment adviser in 2018 or 2019, that entity will retain an independent consultant through December 31, 2019.
SAC, based in Stamford, Conn., was long one of the most profitable hedge funds on Wall Street, recording annual returns of more than 25% over two decades. It was at the center of a major insider trading case. But the government was forced to drop charges against them in October after an appeals-court ruling in a related case raised the burden on proving the traders had profited off insider information. In the wake of the fine, the fund rebranded itself as a family office called Point72 Asset Management that manages his personal fortune.
As part of that settlement, SAC also agreed to return outside investor capital.
The prospect of a Cohen comeback follows a decision by the SEC to weaken its case against him.
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Instead, the U.S. regulator said Cohen “permitted Martoma to make trades based on that information”, while placing similar trades in accounts that he controlled. Cohen himself was never accused of insider trading. But rather than raise any red flags, Cohen rewarded Martoma with a $9 million bonus, according to the SEC. Martoma is appealing the verdict.
