While he declined to comment on the possibility of charges against Cohen, Bharara said the investigation was “ongoing,” and that the government isn’t “restraining” SAC assets.
“I’m not going to say what tomorrow may or may not bring,” he said.
No Coincidence
“When so many people from a single hedge fund have engaged in insider trading, it is not a coincidence,” Bharara said. “Today’s indictment is not just a narrative of names and numbers, it is more broadly an account of a firm with zero tolerance for low returns but seemingly tremendous tolerance for questionable conduct,” he said. “So SAC, over time, became a veritable magnet for market cheaters.”
Some SAC investors have already indicated they want to take their money out. SAC may shed investors who lose confidence in the well-performing firm or the government may shut it down after a conviction or lawsuit loss or a settlement. Diehards may stay giving Cohen enough capital to continue, unless the government ends his hedge fund career.
Deutsche Bank
Banks including Deutsche Bank AG and Goldman Sachs Group Inc. were debating whether to suspend doing business with SAC, which has been one of Wall Street’s biggest trading clients, according to two people briefed on the matter. Spokespeople for the biggest Wall Street banks declined to comment on whether they had come to a decision.
Institutional investors have already redeemed their money in the fund. Some SAC clients will probably keep their money where it is, said Don Steinbrugge, managing partner of Agecroft Partners LLC, a Richmond, Virginia-based firm that advises hedge funds and investors.
“Each new allegation from the SEC will cause some investors to withdraw, however, there will be investors that stay with Steve Cohen to the bitter end,” he said. “Those investors who stay with Cohen have built strong loyalty toward him over time and also don’t see much downside.”
Assets Managed