One of the financial industry's most successful firms is under the gun for alleged insider trading, and some of their rivals and enemies could not be more thrilled about it. So much so that one took out a $100,000 full-page ad in The Wall Street Journal just to gloat over their misfortune.
For those who haven't been following the drama, the $14-billion hedge fund SAC Capital Advisors was indicted by the federal government for insider trading last week. The SAC stands for Steven A. Cohen, the billionaire investor and founder of the company who has had one of the most successful financial careers of the last three decades, but has also been the target of federal regulators for most of the last one. Several former SAC employees have already been arrested or charged for insider trading, but now the investigation threatens to bring down the firm Cohen started with his own money and built into a investment powerhouse.
And Patrick Byrne is thrilled. He's the CEO of Overstock.com, who for years has blamed "naked short sellers" for ruining the stock price of his company, often referring to them as "Lords of the Sith" for their questionable tactics. (Naked shorts are a tactic used to drive down the price of a stock artificially. They are technically illegal as of 2008, but are tough to detect and enforce.) For several years, he refused to name his villains/tormentors, but would frequently drop less-than-subtle clues, like "Someday I may SAC [sack] up and be more explicit."
On Saturday, Byrne bought a full page ad in The Wall Street Journal saying, "Congratulations on the indictment, Stevie, and remember: roll early, roll often." The ad then links to a website, DeepCapture.com, which chronicles and attacks the world of hedge funds — and Cohen in particular. Byrne is one of the website's funders.
If it seems like Byrne is almost gleeful about the possibility of a Cohen demise, that's because he is and he's not shy about it. When asked about the ad by Business Insider, he happily owned up to it, saying:
Shooting SAC Capital dead and throwing all of its employees into the streets is simply civilization scraping some dog--- off its shoe. I felt it was time I spent $100k on a derisive ad in order to say that."
Cohen has not been personally charged with a crime, but he still faces civil penalties for failing to control his employees, that could result him being banned from the financial industry by the Securities and Exchange Commission. Also, he is the sole owner of SAC Capital, and a loss in court or expensive settlement could cost him millions in fees and possibly drive him out of business. (SAC is already losing business due to the legal troubles.) That's good news for Cohen's hedge fund rivals and CEOs who think they've been victimized by him, but doesn't exactly bring out the best in sportsmanship.
See the full ad below, via Quartz.
This article is from the archive of our partner The Wire.
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