Steve Cohen, whose hedge fund SAC Capital Advisors was rocked with an insider trading scandal that led to several convictions, is cleaning up his image by asking a former prosecutor and several FBI agents to join his new $10 billion investment firm, Point 72 Asset Management, as reported by the New York Times. Cohen narrowly missed a conviction himself, and dealing with the very FBI who once nearly landed him behind bars seems ironic, but he has stated his desire to prevent insider trading from happening again at his new firm. The FBI agents did not accept the generous offers to join Point72 Asset Management, even though it would have meant a heavy pay raise.
Although Cohen was not convicted, he has been suspended from managing money for outside investors, and is currently working on managing his own fortune. He plans to put together an outside board of advisors to keep watch on trading practices. Some see Cohen’s recent strategies as way to get the SEC to allow him to manage other people’s money again. Erik Gordon, business professor at the University of Michigan, said, “It could be window dressing, but it is possible this experience has really shaken him.” Mark Herr, spokesman for Cohen denied he plans to manage investors’ money again.
Steve Cohen likely feels vindicated at recent cases in Manhattan that overturned the conviction of two insider traders, and set a precedent that makes it harder to convict people of insider trading if they are sufficiently far removed from the source of the illegal tip. While Cohen has Civil Administration claims against him to settle, which could prevent him from managing securities again, these recent rulings and increased oversight at his firm might bring Cohen back in the game.