As Steven Cohen nears a settlement that may put his SAC Capital Advisors LP out of business over allegations of insider trading, some of his overseas portfolio managers aren’t waiting.
Lia Forcina, who managed more than $700 million at SAC Capital out of London, this month quit to join BlueCrest Capital Management LLP, three people with knowledge of the matter said last week. At least four other portfolio managers have recently left SAC in the U.K., according to regulatory records and people familiar with their departures.
“No one has pointed fingers at anyone in London, so they can almost say they are a different business,” said Gary Goldstein, the chief executive officer of executive search firm Whitney Group LLC, as to why the London-based SAC traders may be having an easier time getting jobs than their counterparts in the U.S. “They aren’t being managed day-to-day by Steve.”
The departures are accelerating after a U.S. grand jury indicted SAC in July on allegations that the $14 billion firm engaged in unprecedented illegal trading for more than a decade, prompting clients to pull virtually all outside cash. Cohen, whose 21-year-old firm is negotiating a settlement with the government, is likely to be barred from managing other peoples’ money and pay a fine of $1.8 billion, people familiar with the matter said this month.
Jonathan Gasthalter, a spokesman for SAC at Sard Verbinnen & Co., declined to comment on settlement talks. At the time of the July 25 indictment, SAC said it never encouraged, promoted or tolerated illegal trading.
Government’s Price
SAC is accused of encouraging its traders to obtain information from company insiders while ignoring indications it was illegal. Six former SAC employees have pleaded guilty to trading on inside information, and two more are scheduled to go on trial.
SAC was charged with four counts of securities fraud and one count of wire fraud. The alleged scheme, which involved more than 20 companies and went back as far as 1999, helped reap hundreds of millions of dollars in illicit profits, the U.S. said. The government has told SAC that the longer it waits to settle, the higher the price will be, people familiar with the negotiations said this month. That’s because the closer the case gets to going to trial, the higher the government’s costs.
SAC employees have been sending out resumes to hedge-fund firms and recruiters since the indictment, hoping to land jobs next year when they expect the firm will need far fewer employees.
Sticking Around