Stevie Cohen’s shop is feeling the heat after the Galleon bust, and the allegation that one trader placed illicit trades while employed by hedge fund SAC.
According to Bloomberg, the firm has been seeking to soothe nervous investors:
SAC Capital Advisors LLC, the hedge- fund firm run by Steven Cohen, reviewed its buying and selling of stocks cited in the Galleon Group LLC insider-trading cases and found nothing suspicious, according to one of its investors.
SAC, which oversees $14 billion, also told the investor that neither it nor any employees had received subpoenas related to the cases. Clients have contacted the Stamford, Connecticut- based firm since prosecutors said last week that a former SAC portfolio manager agreed to plead guilty and cooperate with their probes, said the investor, who asked not to be identified because the information is private.
“SAC has a built and maintained AAA-grade infrastructure, including compliance,” said Ron Geffner, a lawyer at New York- based Sadis & Goldberg LLP, whose clients include hedge funds. Geffner, who isn’t representing SAC, said it was understandable that the firm would review the trading.
It’s worth wondering how much damage has been inflicted on SAC’s reputation, regardless of whether there are charges filed or not.
No matter what, they’re now part of the Galleon story, and newly-sceptical investors will begin wondering about anyone with even a sniff of impropriety.