SAC Capital Could Be Left With Less Than A Billion In Outsider Money After Today

Reuters/ Steve MarcusToday is the quarterly deadline for SAC Capital investors to redeem their money from the embattled Stamford, Connecticut-based hedge fund. 

According to multiple press reports, the hedge fund could be left with less than a billion in outsider money. 

The Wall Street Journal’s Jenny Strasaburg reported that SAC sees investors yanking $3.5 billion from the hedge fund by today’s deadline.

The fund already saw investors ask to pull $1.7 during the first quarter redemption period. 

If those estimates are correct, it would leave the hedge fund with very little outsider capital.  Bloomberg News estimates that it could be left with less than $1 billion.

About $9 billion of SAC’s $15 billion in AUM belong to billionaire founder Steve Cohen and the fund’s employees.   According to Bloomberg News, $7.5 billion of that is Cohen’s and the other $1.5 billion belongs to employees.  

Bloomberg News reported earlier that Cohen has considered returning outsider money and running SAC as a family office.  

It’s widely known that Cohen is the ultimate target of the government in their crackdown on insider trading.

In the case against former SAC portfolio manager Mathew Martoma, Cohen has been identified as “Portfolio Manager A.” 

He has not been charged with any wrongdoing.  He may never be charged and he has maintained that he acted appropriately.  

Back in March, SAC agreed to pay $616 million to the Securities and Exchange Commission to settle two separate civil insider trading cases.  

In late April, SAC’s lawyers called a meeting at the United States’ attorney’s office in Manhattan and they were surprised when 17 government officials showed up, the New York Times’ Peter Lattman and Ben Protess reported.

After that meeting, the New York Times reported that Cohen and other SAC execs received subpoenas to testify before a grand jury in an insider trading case against his hedge fund.  

Under the statute of limitations for insider trading, if the government were going to file any additional charges in this case they would have to do so by mid-July, which is the five year anniversary of the trades being questioned. 

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