December 17, 2014
The Revolving Door And Steve Cohen
Posted by David Zaring

The Times reports:

The billionaire investor, who managed to fend off a criminal insider trading investigation of himself, if not of his former hedge fund, is looking for a former prosecutor and several agents from the Federal Bureau of Investigation to join his new $10 billion investment firm, Point72 Asset Management, said several people briefed on the matter, who spoke on the condition of anonymity.

Look, one of the reasons to feel good about the revolving door is that it salts financial institutions with people who expect law compliance.  So maybe that explains this development, and we should celebrate Cohen's search for g-men.  Or maybe it is, as the Times reports, that he was heartened by the insider trading ruling of the Second Circuit requiring the trader to know both that he was trading on inside information and that the information was obtained in exchange for a benefit, and just wants to grow the enterprise on a number of different fronts.

I'm not sure he should be too heartened by that ruling.  It only may free one of his convicted lieutenants, and certainly wouldn't do anything about Matthew Martoma, who both paid for and traded on information provided by a pharma insider.

 

Administrative Law, Securities, White Collar Crime | Bookmark

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