SEC

SEC Changes Tactics In Its War Against Steven Cohen

Anything to put him out of business

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In the end, billionaire Steven Cohen, one of the most successful hedge-fund managers of his generation, could end up getting banned from the business he dominated for an error of omission, not commission.

In an administrative action that constitutes its first formal salvo against Cohen, the U.S. Securities and Exchange Commission alleged he failed to supervise two wayward portfolio managers and ignored "red flags." The agency stops short of accusing the owner of SAC Capital Advisors LP of insider trading. While the proceeding may result in his being barred from managing other people's money, it won't carry the potential penalties available if the SEC had sued him. It also pales in comparison to a grand jury indictment for securities fraud, and the 20 year prison term a conviction could bring.