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Is FBI Special Agent King Set To Take Down Stevie Cohen?
The man who brought down Galleon is not finished, and if the report by Reuters' Matt Goldstein is correct, FBI special agent B.J. Kang may well have his sights set on the top of the hedge fund pantheon: SAC Capital itself. This is not a surprise to Zero Hedge, and is something we have speculated on in the past, however the intricacies of such a spectacular take down would have to be refined beyond any reasonable doubt as any allegations against Mr. Cohen will likely see the involvement of every single $1,000/hour billing lawyer in the world, taking on any DOJ case.
The background on the chase:
When Bernie Madoff, who engineered history's
The question on the minds of investors, managers and lawyers inside and outside the hedge fund industry today is, who's next?
Of course, no one knows for sure. But court documents and interviews
Mr. Cohen is not a new pet-peeve of the FBI agent: Reuters has learned that Kang investigated Who is Agent Kang: Just like Cohen, Kang avoids the limelight Known simply as B.J. to lawyers and others who have worked with him,
But Kang's toughest challenge may lie ahead Lee, one of five cooperating witnesses in the Galleon case, is
The government's interest in SAC and Cohen shouldn't surprise
biggest Ponzi scheme, was arrested, FBI Special Agent Kang was right at
his side. And less than a year later, there was Kang again, in a "perp
walk," shuffling alongside a handcuffed Raj Rajaratnam, the former
hedge fund star at Galleon accused of earning millions off illegally
obtained stock tips.
with many industry sources familiar with the case show that agent Kang
may be focusing in on Steven A. Cohen and his $12.9 billion SAC Capital
Advisors, L.P.
allegations of trading irregularities at SAC two years ago, though the
inquiry concluded with no charges being filed against the firm.
and refused to be interviewed for this story. The FBI wouldn't even
disclose biographical information about him, including his age.
Kang, who is Korean-American, once joked that he prefers using initials
because his full name is too hard for most people to pronounce. With
his accounting background he is able to delve deeply into the minutiae
of financial crimes.
of him. Lawyers, hedge fund traders and others with knowledge of the
ongoing investigation say the agent and federal prosecutors are now
focused on a number of former SAC employees whose names have cropped up
during the Galleon phase of the inquiry and who also may have engaged
in insider trading.
prepared to tell authorities about any insider trading he may have
engaged in while working as a technology analyst at SAC from 1999 to
2004, according to a court filing. Most legal experts say prosecutors
will have a hard time using any evidence Lee may provide given that it
is relatively old.
anyone. Cohen's firm stands at the pinnacle of the $1.5 trillion hedge
fund industry. Critics have often complained that SAC gets better
access to information from Wall Street firms because of its sheer size
and the hundreds of millions in commissions it pays out.
Amusingly, the FBI case veers into the story of one Andrew Tong who made tabloid fodder several years ago in relation to a very peculiar lawsuit he filed against his supervisor:
In 2007, Kang was assigned to work on a
But before the probe by Brooklyn prosecutors was closed, Kang
In a lawsuit earlier that year Tong had charged that his male
Courtesy of filings in that litigation being finally unsealed we get a glimpse of one reason why SAC could be so, allegedly, very profitable: In early 2006, according to the court papers,
The strategy didn't work and SAC took a $3 The treatment of the Tong case highlights why Kang needs to have a bulletproof case against the multi-billionaire: But the court filings in the Tong lawsuit hint
"Steven Cohen only wants us to make money, he Yet with new possible cooperating witnesses coming out of the Galleon case, the prosecution's case may just have gotten that extra push it needed
Former SAC employees, however, have already
In pleading guilty on October 13, Lee signed a cooperation agreement
The Wall Street Journal previously has reported that after Spherix
Lee is also expected to testify about any improper trading he may
While we doubt Mr. Cohen is losing any sleep at this time, the storm clouds may be gathering. Because as every hedge fund knows all too well, all it takes is one disgruntled employee who may have left on less than stellar terms to wait for the expiration of his/her "non-disparage" clause and to end up destroying their former employer. This goes doubly so with the FBI running around, and presumably recording every single hedge fund conversation. Which reminds us that it is time to take a look at how the revenue stream for Gerson Lehrman Group is doing these days.
previously undisclosed investigation involving alleged trading
irregularities at Cohen's hedge fund, said people familiar with that
matter. That inquiry, opened by federal prosecutors in Brooklyn, New
York, concluded with authorities declining to take action against Cohen
or anyone else associated with SAC.
interviewed former SAC analyst Andrew Tong, who had already become a
tabloid sensation -- not to mention an embarrassment to SAC.
supervisor, Ping Jiang, then a top SAC trader, forced him to perform
oral sex on him before completing a trade, according to people familiar
with the investigation and court papers. Tong also alleged Jiang
ordered him to take female hormones to turn him into "the ideal
analyst/trader," combining both male and female characteristics, the
court documents note.
Jiang directed Tong and at least two other SAC employees to take part
in a manipulative trading scheme involving shares of China Yuchai
International Ltd., a Chinese-based diesel engine manufacturing
company. The court papers suggest the hedge fund took a short position
in shares of China Yuchai; betting the stock would fall in price. The
papers say Tong and others then began "manufacturing false negative
analytical reports about CYD to facilitate this manipulation."
million hit, which Tong claims Jiang ultimately blamed on him. Tong
alleged that Jiang used the loss as a justification to fire him and
that the real reason for his dismissal was his decision to stop taking
the female hormones and engaging in "sexual conduct with Mr. Jiang,"
the documents say.
at the difficulties Kang and others in law enforcement may face in
pursuing a case against SAC if any wrongdoing is ever uncovered. In one
filing, Tong recalls Jiang telling him that SAC places a premium on
secrecy and guarding its trading strategies -- even from some of the
fund's top officers.
doesn't care or want to know our secrets to make money -- SAC doesn't
need to know and doesn't want to know," Tong said in the filing,
quoting one of Jiang's instructions to him.
started to talk. Lee's cooperation was secured in part because of
incriminating evidence that federal authorities had captured from a
government wiretap on his cell phone while working at San Jose,
California-based Spherix Capital. (Kang oversaw the tap on Lee's phone.)
that requires him not only to testify about his misdeeds at Spherix,
but also provide prosecutors with any evidence of alleged insider
trading over an eight-year period starting in 1999. He worked at SAC
for five of them, and the rest of the time was at Stratix Capital
Management.
closed its doors in February, federal authorities encouraged Lee -- who
had begun cooperating with the investigation -- to try to return to
SAC. But Cohen refused, the Journal reported, because he was suspicious
of the reasons behind Spherix's closing.
have done at Stratix, a hedge fund founded by two more SAC alumni,
Richard Grodin and Ian Goodman. That fund, which counted SAC among its
investors, closed in 2007. Grodin launched another fund, Quadrum
Capital, and it too abruptly shut down this year. A few months ago,
federal authorities asked Quadrum to turn over some trading records,
but the government hasn't asked for anything since, said a person close
to the fund.
»
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If that isn't a testament of how bad the job market is these days, I don't know what is. Perhaps we an see a follow up to this story on Jerry Springer.
I read in Timothy Sykes book that he took that hormone treatment to improve his penny stock trading(he alleges that his father forced him to do it which I find to be a suspicious claim).
He advises all his followers to do the same. At Sykes trading conventions he gets his devoted followers to "drink from the fountain of knowledge" and forces them to swallow.
Sounds just like Ping. Bunch of penny stock nuts.
In this economy, people will do anything to be the 'head' trader.
@Daedal Certainly gives new meaning to 'pump and dump'.
SAC Tong Ping BJ top Yuchai Kang
Quadrum Klingons Spherix Stratix
Dick Grodin Zerohedge
Headline names the agent as King, not Kang.
So did he take the female hormones?
"So did he take the female hormones?"
If taking female hormones correlated with making money, the traders at the Vampire Squid would all have great racks.
blowing someone and taking female hormones are really the only trading I haven't tried on this market.....hmmmmm!
Gives new meaning to "hedge fund"
Tong was suspiciously fired from another large hedge fund in Milwaukee a couple of years earlier.....?????
Now THAT"S the type of outside the box thinking that will make you double check your analysis.
Tong gave a good head for business.....had a good head for business I meant...had...yea that's it had
Its been rumored SAC has been involved with the naked shorting of SPONGETECH, a sponge company that trades on the Pink Sheets, I’m sure you’ve seen their advertising at sports games. There are a few hedge funds that are short 5 times the companies’ outstanding shares, which were facilitated through the “Madoff” market making exemption, ie, the creation of “phantom shares” through the FTD mechanism. The SEC is aware of the naked shorts, and I personally have contacted the FBI about this case, perhaps SAC got nabbed. Read about SAC’s involvement in Dendreon
over at Deepcapture, I hope SAC is finally getting what’s been coming for them a long time.
Its been rumored SAC has been involved with the naked shorting of SPONGETECH, a sponge company that trades on the Pink Sheets, I’m sure you’ve seen their advertising at sports games. There are a few hedge funds that are short 5 times the companies’ outstanding shares, which were facilitated through the “Madoff” market making exemption, ie, the creation of “phantom shares” through the FTD mechanism. The SEC is aware of the naked shorts, and I personally have contacted the FBI about this case, perhaps SAC got nabbed. Read about SAC’s involvement in Dendreon over at Deepcapture, I hope SAC is finally getting what’s been coming for them a long time.
My goodness.
Goodness gracious.
Wow.
Not sure...to think...here...this...
Must....not....think about....
HAHAHAHA BLOWJOBS! AHAHehaHAHEHahAHA
OHM MY GOD!
AHEHAHEHahaHAHEHA
Goldman SACKS! A BUNCH OF CLOSET TEABAGGERS!!!!
TRADING BABY BATTER!@#!#()*@
AHEHAhehaAHEHAhahAhehaha
-MobBarles
Sykes is a nobody.
What's next, sex with farm animals? How does one assimilate information like this? Is there no limit? I guess when a line is crossed, what does it matter where you go from there.
BJ Kang, huh? I was waiting for a reference to his sister Kodos and their otherworldly abilities in catching financial badguys. (For those who don't know what I mean, youtube a Simpsons episode with Kang and Kodos).
Little does Agent Kong know that he's just a minion/tool of the most corrupt and criminal government in the history of the world. I bet he thinks himself to be a smartass stand-up guy going after the "bad guys" when, ironically, the baddest guy in town is his own employer.
With the clear and outright declaration of war by the US Govt. against the hedge funds, it makes absolutely no sense for any them to be based in America anymore. If any hedge fund does not see what's coming their way in the United States, they probably deserve not to exist.
They are going to find the largest insider trading fraud in history was just perpetrated by the Fed and the Banks they gave out trillions of dollars to...We deserve to know who received the money. Once received, was the money used by banks for trading operations? Is that why the banks now do not segregate on their financial statements from trading operations? What did the banks invest in once they received cash? Who had knowledge of these equity infusions? Did they personally profit? Why wasn't this disclosed to all investors? Why did some have this knowledge and some did not? How did having the insider knowledge of firms secretly receiving hundreds of billions of cash from the Fed impact their investment decisions? How much of the bank revenue was from trading operations? How were their trading investments influenced by knowledge of whom and when the Fed would provide these secret cash infusions? How much of the bonuses at Goldman Sachs and others was based upon trades as a result of the undisclosed to the public information about the Feds actions? Is this why Goldman Sachs was successful in making $100 Million a day in trades for nearly 100 days in a row without fail. If the Fed complicit in a massive defrauding of the American people? We deserve to know. We need a full Congressional investigation to resolve this matter.
The longest running and biggest insider trading case ever is the continuous buying of stocks and stock futures by the Federal Reserve and those few banks in the know. Where do you thinks those record profits came from.
Fat Raj SACrifice
Obfuscate alleviate
Obey first two rules