It appears that the noose is tightening and the wobbly-chair that Steve Cohen is standing on is getting wobblier... As Bloomberg reports, after five years under investigation for insider trading Steve Cohen is considering a 'deal' with prosecutors that would shut his $15 billion fund to outside investors and (as we noted this morning) shift a family (friends and employees) office. [5]
- *COHEN SAID TO HAVE DISCUSSED DEFERRED PROSECUTION AGREEMENT
- *COHEN SAID TO CONSIDER RETURNING OUTSIDE INVESTORS' MONEY
- *COHEN SAID TO CONSIDER CONTINUING AS A FAMILY OFFICE
The deferred prosecution is intriguing as "when a company enters into a DPA with the government, or an NPA for that matter, it almost always must acknowledge wrongdoing..." and the clock is ticking with the statute of limitations up at the end of July.
And as so often happens, what we said this morning [5], turned out to be spot on: "All of which simply means that Cohen will merely convert into a "friend, employees and family" office: at last check just the employees had billions of their own cash invested in the hedge fund."
In other words, while implicitly admitting guilt for trading on illegal information for decades, the government will be generous enough to leave Stevie his ill-gotten $8+billion, which like Soros, will be the sole source of cash in the former hedge fund titan's ongoing attempts to corner assorted "expertly networked" markets. You know, with "information arbitrage"...