This week the Fed filed the first charges against traders associated with hedge fund SAC Capital. Still though, nobody currently at the firm has been charged with anything, but it seems clear that the government is turning up the heat on Steve Cohen’s shop.
A Bloomberg investigation looks at several trades that coincided with trades that have been at the centre of the investigation.
SAC securities filings from 2006 through 2009 show position changes in at least nine other stocks during periods when prosecutors have said Galleon Group LLC co-founder Raj Rajaratnam and others were trading based on insider tips. The companies are Akamai Technologies Inc., Atheros Communications Inc., ATI Technologies Inc., Clearwire Corp., EBay Inc., Google Inc., the former Hilton Hotels Corp., Intel Corp. and Polycom Inc.
Now bear in mind that these are big, known companies, and SAC holds TONS of positions, so it would be shocking if the firm didn’t have all kinds of overlaps with trades that were made suspiciously by others.
Still, there are specific trades that will raise eyebrows, such as:
SAC filings show the firm almost tripled its stake in Hilton to 1.2 million shares in the quarter ended June 30, 2007. Three days later, on July 3, Blackstone Group LP said it would buy Hilton. When trading resumed on July 5 following the Independence Day holiday, Hilton shares soared 26 per cent. SAC reported liquidating 99 per cent of its stake by that Sept. 30.