Courtesy of Larry Doyle.
News breaks in the past 24 hours that one of Wall Street’s largest traders, “Stevie-boy” Cohen of SAC Capital, is now looking to cut a deal with the Feds. Is the heat in Stevie’s kitchen getting a little too hot?
As Bloomberg Businessweek reminds us:
After a multiyear investigation conducted by the U.S. Attorney’s Office, the FBI, and the Securities and Exchange Commission, a grand jury indicted SAC Capital on July 25, accusing the firm of fostering a culture where employees engaged in rampant securities fraud.
Now Stevie wants to play Let’s Make a Deal.
The indictment said traders at SAC engaged in insider trading that was “substantial, pervasive, and on a scale without known precedent in the hedge fund industry.” Manhattan U.S. Attorney Preet Bharara described SAC as “a magnet for market cheaters.” Cohen has denied the charges and maintains that he and his firm behaved appropriately.
But now . . .
Lawyers for hedge fund SAC Capital Advisors last week reached out to prosecutors in New York to say that SAC founder Steven Cohen is interested in settling the civil and criminal cases against him and his company, according to people familiar with the matter.
The settlement of the criminal case against the firm would likely involve a substantial fine, these people said; the current number being discussed is in the neighborhood of $1 billion.
Let’s take an unscientific poll. What do readers think should happen here?
Should the Feds look to settle? In doing so, do people believe that the Feds will have landed the biggest whale and brought him and his firm to justice?
Or does a settlement send a signal that a double standard persists and justice can be bought if you have the resources and the clout?
Or does a settlement land somewhere in between these opposite ends of the spectrum? Is SAC Capital too large a trading partner for the street and might the Feds create collateral damage if they fully pursue their case? Where is the line drawn in terms of who gets to purchase justice versus having justice served upon them?
All comments encouraged and appreciated.
Larry Doyle
Please pre-order a copy of my book, In Bed with Wall Street: The Conspiracy Crippling Our Global Economy, that will be published by Palgrave Macmillan on January 7, 2014.
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I have no business interest with any entity referenced in this commentary. The opinions expressed are my own. I am a proponent of real transparency within our markets so that investor confidence and investor protection can be achieved.
