6 ms·

SAC Capital hit with criminal charges

39 points by kghose 13y ago

ddebernardy 13y ago
SAC Capital of Deep Capture fame? Why am I not surprised? http://www.deepcapture.com/tag/sac-capital/ http://www.deepcapture.com/tag/sac-capital/
tomkarlo 13y ago
One thing that's not being mentioned in these stories: at least at it's height, SAC trading (reportedly) represented several percentage points of NYSE / NASDAQ volume on an average day (which is huge considering their AUM and the total number of organizations trading). The allegation that they were essentially an organized insider trading scheme is pretty spectacular given that scale. (Correction: 3% of NYSE, 1% of NASDAQ: http://www.vault.com/company-profiles/hedge-funds/sac-capital-advisors,-lp.aspx http://www.vault.com/company-profiles/hedge-funds/sac-capita...)
jcampbell1 13y ago
Finally! The whole world has known that SAC is nothing but insider trading with plausible deniability. SAC even had a platform, where if you submitted a trading idea, and they used it, then they would pay you a fee. It was a scheme to harvest insider information but give SAC an excuse.
Osiris 13y ago
From what I've read, even with criminal charges it's unlikely that Steven Cohen or anyone else involved will serve jail time. Here in Colorado an electronics recycler sent their recyclables to China instead of actually recycling and the CEO got 30 months in prison. I continue to be shocked that bankers and investors get away with fines and a slap on the wrist. I'm not aware of any that have served prison time since the recession started.
- PublicEnemy111 13y ago
  raj rajaratnam?
  - fnordfnordfnord 13y ago
    Okay, how many more have you got?
    - soupboy 13y ago
      http://www.sec.gov/spotlight/insidertrading/cases.shtml http://www.sec.gov/spotlight/insidertrading/cases.shtml
      - Osiris 13y ago
        There is no mention of jail time in any of those cases. The ones I saw all say "paid more than $x to settle the charges".
        rayiner 13y ago
        Google the names. Several of those people went to jail. E.g. http://www.myquitamlawsuit.com/index.aspx?id=news_insider_trading_clay_capital http://www.myquitamlawsuit.com/index.aspx?id=news_insider_tr....
        fnordfnordfnord 13y ago
        >"James F. Turner II, Clay Capital Management, LLC hedge fund's chief investment officer has received a one-year prison sentence and a $25,000 fine for insider trading. Turner's conduct netted over $2.5 million." That ought to put a stop to it eh?
  - nonchalance 13y ago
    He is Indian. If you look back at other scandals, usually it's a person considered in a racial minority (Jerome Kerviel, Joseph Jett) that see jail time
- rayiner 13y ago
  You haven't been paying attention: http://online.wsj.com/article/SB10001424052970204774604576626991955196026.html; http://online.wsj.com/article/SB1000142405297020477460457662... http://www.bloomberg.com/news/2013-07-01/ex-galleon-trader-zvi-goffer-s-10-year-sentence-is-upheld.html; http://www.bloomberg.com/news/2013-07-01/ex-galleon-trader-z... http://www.advancedtrading.com/regulations/the-9-most-notorious-insider-trading-cas/231903257 http://www.advancedtrading.com/regulations/the-9-most-notori....
  - fnordfnordfnord 13y ago
    For each of these token prosecutions, there are many others who continue unabated. Fines, if any are often a trivial portion of the profits stolen in such schemes, which incentivizes the behavior.
    - rayiner 13y ago
      There is nothing "token" about a prison sentence.
      - fnordfnordfnord 13y ago
        There are plenty who serve no time, and Federal prison for white collar crimes when compared to sentencing for other crimes, is token, at least in the relative sense.
- onebaddude 13y ago
  >I continue to be shocked that bankers and investors get away with fines and a slap on the wrist. I'm not aware of any that have served prison time since the recession started. Have you stopped to think that maybe, possibly, it's because there very little provable, criminal wrong-doing? And that perhaps it's not a good idea, for the country and its economy, to throw capitalists in jail when a business goes south, simply because the populace demands heads? That's not a good precedent. Not everything is a conspiracy. The population currently detests Wall Street. If there was rampant criminal action associated with the recession, some politician would have latched on and run with it, and would have been a hero. Should we also throw in jail all those mortgage applicants who lied about their job or income on the application? That was also fraud that led to the crisis.
PublicEnemy111 13y ago
Inside information for wall street is what steroids are for baseball players - everyone uses it.It's the only way to compete and everyone just tries to one-up each other by using more
- Zigurd 13y ago
  That's the elephant in the room. There are far more hedge funds than there are rocket science algorithms that could possibly confer a trading advantage.
  - deleted 13y ago
    [deleted]
chollida1 13y ago
This is dominating the discussion at our fund right now. They should have traded commodities, at least with commodities, most forms of insider trading are legal:) It will be interesting to see if the fund lives on from this . I find this unfortunate, Steve Cohen is one of the people in this industry I enjoyed following.
CoachRufus87 13y ago
How many of these guys will actually end up behind bars?

39 points by kghose 13y ago

SAC Capital of Deep Capture fame? Why am I not surprised? http://www.deepcapture.com/tag/sac-capital/ http://www.deepcapture.com/tag/sac-capital/

tomkarlo 13y ago

One thing that's not being mentioned in these stories: at least at it's height, SAC trading (reportedly) represented several percentage points of NYSE / NASDAQ volume on an average day (which is huge considering their AUM and the total number of organizations trading). The allegation that they were essentially an organized insider trading scheme is pretty spectacular given that scale. (Correction: 3% of NYSE, 1% of NASDAQ: http://www.vault.com/company-profiles/hedge-funds/sac-capital-advisors,-lp.aspx http://www.vault.com/company-profiles/hedge-funds/sac-capita...)

jcampbell1 13y ago

Finally! The whole world has known that SAC is nothing but insider trading with plausible deniability. SAC even had a platform, where if you submitted a trading idea, and they used it, then they would pay you a fee. It was a scheme to harvest insider information but give SAC an excuse.

Osiris 13y ago

From what I've read, even with criminal charges it's unlikely that Steven Cohen or anyone else involved will serve jail time. Here in Colorado an electronics recycler sent their recyclables to China instead of actually recycling and the CEO got 30 months in prison. I continue to be shocked that bankers and investors get away with fines and a slap on the wrist. I'm not aware of any that have served prison time since the recession started.

PublicEnemy111 13y ago
raj rajaratnam?
- fnordfnordfnord 13y ago
  Okay, how many more have you got?
  - soupboy 13y ago
    http://www.sec.gov/spotlight/insidertrading/cases.shtml http://www.sec.gov/spotlight/insidertrading/cases.shtml
    - Osiris 13y ago
      There is no mention of jail time in any of those cases. The ones I saw all say "paid more than $x to settle the charges".
      - rayiner 13y ago
        Google the names. Several of those people went to jail. E.g. http://www.myquitamlawsuit.com/index.aspx?id=news_insider_trading_clay_capital http://www.myquitamlawsuit.com/index.aspx?id=news_insider_tr....
        fnordfnordfnord 13y ago
        >"James F. Turner II, Clay Capital Management, LLC hedge fund's chief investment officer has received a one-year prison sentence and a $25,000 fine for insider trading. Turner's conduct netted over $2.5 million." That ought to put a stop to it eh?
- nonchalance 13y ago
  He is Indian. If you look back at other scandals, usually it's a person considered in a racial minority (Jerome Kerviel, Joseph Jett) that see jail time
rayiner 13y ago
You haven't been paying attention: http://online.wsj.com/article/SB10001424052970204774604576626991955196026.html; http://online.wsj.com/article/SB1000142405297020477460457662... http://www.bloomberg.com/news/2013-07-01/ex-galleon-trader-zvi-goffer-s-10-year-sentence-is-upheld.html; http://www.bloomberg.com/news/2013-07-01/ex-galleon-trader-z... http://www.advancedtrading.com/regulations/the-9-most-notorious-insider-trading-cas/231903257 http://www.advancedtrading.com/regulations/the-9-most-notori....
- fnordfnordfnord 13y ago
  For each of these token prosecutions, there are many others who continue unabated. Fines, if any are often a trivial portion of the profits stolen in such schemes, which incentivizes the behavior.
  - rayiner 13y ago
    There is nothing "token" about a prison sentence.
    - fnordfnordfnord 13y ago
      There are plenty who serve no time, and Federal prison for white collar crimes when compared to sentencing for other crimes, is token, at least in the relative sense.
onebaddude 13y ago
>I continue to be shocked that bankers and investors get away with fines and a slap on the wrist. I'm not aware of any that have served prison time since the recession started. Have you stopped to think that maybe, possibly, it's because there very little provable, criminal wrong-doing? And that perhaps it's not a good idea, for the country and its economy, to throw capitalists in jail when a business goes south, simply because the populace demands heads? That's not a good precedent. Not everything is a conspiracy. The population currently detests Wall Street. If there was rampant criminal action associated with the recession, some politician would have latched on and run with it, and would have been a hero. Should we also throw in jail all those mortgage applicants who lied about their job or income on the application? That was also fraud that led to the crisis.

PublicEnemy111 13y ago

Inside information for wall street is what steroids are for baseball players - everyone uses it.It's the only way to compete and everyone just tries to one-up each other by using more

Zigurd 13y ago
That's the elephant in the room. There are far more hedge funds than there are rocket science algorithms that could possibly confer a trading advantage.
- deleted 13y ago
  [deleted]

chollida1 13y ago

This is dominating the discussion at our fund right now. They should have traded commodities, at least with commodities, most forms of insider trading are legal:) It will be interesting to see if the fund lives on from this . I find this unfortunate, Steve Cohen is one of the people in this industry I enjoyed following.

CoachRufus87 13y ago

How many of these guys will actually end up behind bars?