The longrunning insider trading investigation of Stephen A. Cohen and his hedge fund, SAC Capital, has finally come to a head.
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The US Securities and Exchange Commission (SEC) has charged Cohen with failing to supervise two senior employees and prevent them from conducting insider trading. If found guilty, Cohen could face “financial penalties, a supervisory and financial services industry bar, and other relief,” according to an SEC press release. The charges come just ahead of a legal deadline government was facing to file a suit against Cohen based on the evidence gathered. Other regulatory organizations—such the Federal Bureau of Investigation (FBI)—may still file additional, possibly criminal charges.
The SEC has had a busy day. Earlier today, it rejected an $18 million settlement that its enforcement division had struck with hedge fund investor Phil Falcone and his firm, Harbinger Capital Partners. The SEC accused Falcone of market manipulation, borrowing from client money to pay his taxes, and giving special preference to certain investors.