Steven A. Cohen is poised to make a return to the hedge-fund industry by 2018 under an accord with U.S. regulators that settles allegations that the billionaire failed to supervise a convicted insider-trader at SAC Capital Advisors LLC.
The settlement requires that the family office Cohen now runs, Point72 Asset Management LP, undergo routine inspections by the Securities and Exchange Commission, the regulator said in a statement Friday. Cohen neither admitted nor denied the SEC’s claims that he failed to monitor Mathew Martoma, according to the statement.
Before handling outside money again, Cohen will need to have an independent consultant ensure that he has sufficient safeguards to detect and deter insider trading, the SEC said.
“The strong combination of a two-year supervisory bar and additional oversight requirements achieves significant and immediate investor protection and deterrence, while ensuring that the activities of his funds are closely monitored going forward,” SEC enforcement chief Andrew J. Ceresney said in the agency’s statement.
The prospect of a Cohen comeback follows a decision by the SEC to weaken its case against him. An initial action also accused Cohen of failing to supervise former SAC fund manager Michael Steinberg. The SEC removed Steinberg from the case after U.S. prosecutors dropped charges against him in October following a court ruling that imposed a higher burden on the government to make insider-trading convictions stick.
Lifetime Ban
In a memo to Point72 employees Friday, Cohen said permission to seek outside investors “does not necessarily mean we will.”
“Should we become a registered investment adviser in the future, we will maintain our focus on delivering superior risk- adjusted returns, not accumulating assets and fees,” he wrote in the memo, which was obtained by Bloomberg News.
Point72 spokesman Mark Herr declined to comment on the settlement.
When the SEC first sued Cohen in July 2013, he returned money to outside investors and transformed SAC into Point72. At the time, SEC enforcement officials sought a lifetime ban on Cohen managing client assets, people familiar said.