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Ex-Wife Sues Fund-Manager Cohen


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from wsj:

 

Billionaire hedge-fund manager Steven Cohen's ex-wife sued him and his firm SAC Capital Advisors on Wednesday, claiming that he engaged in insider trading during the 1980s and hid assets during their divorce proceedings.

 

The lawsuit, filed in U.S. District Court in Manhattan, accused Mr. Cohen and his Stamford, Conn.-based firm of a long-running racketeering scheme.

 

Patricia Cohen, who married Mr. Cohen in 1979 and separated from him in 1988, is seeking at least $100 million.

 

"Defendant Cohen's fraudulent concealment of his activities from Ms. Cohen was consistent with a pattern of highly secretive conduct that has long characterized his business and personal affairs," the lawsuit alleged.

 

Some of the money concealed by Mr. Cohen came from trading in General Electric Co.'s 1986 acquisition of RCA, the lawsuit alleged. Mr. Cohen allegedly told his former wife that he received inside information about the deal in late 1985, but that it was not illegal.

 

"These are ludicrous allegations made by a former spouse that are entirely without merit," said Jonathan Gasthalter, a spokesman for SAC.

 

Mr. Cohen is one of the hedge-fund industry's most successful investors, and his $13 billion firm is under scrutiny for links to an expanding insider-trading case against New York hedge fund Galleon Group and that firm's founder, Raj Rajaratnam.

 

SAC has ties to a number of individuals involved in the Galleon case. The most prominent one stems from an October plea agreement signed by Richard Choo Beng Lee, a former SAC trader who is a witness in the Galleon case. Mr. Lee, who hopes to receive lighter penalties for cooperating, has agreed to provide information to the government about the activities of other SAC traders during the period he was employed by a division of SAC, from 1999 until 2004, people familiar with the matter said.

 

Mr. Lee's lawyer said Wednesday that his client is cooperating with investigators, and declined to comment on what information Mr. Lee has provided or will provide to the government.

 

SAC hasn't received subpoenas in the case or been contacted by authorities, according to people close to the situation.

 

Mr. Cohen's firm has faced questions from investors, and some big clients have discussed the possibility of pulling money from the firm, though it is unclear whether withdrawal requests have been submitted, people who have talked with investors said.

 

Mr. Gasthalter declined to comment about investor matters.

 

In her lawsuit, Ms. Cohen claimed she learned that Mr. Cohen may have been concealing assets following a profile of Mr. Cohen by the television program "60 Minutes" in March 2006. She claimed a subsequent investigation by her and others acting on her behalf revealed by 2008 the existence of bank accounts, real-estate transactions and other facts not disclosed in their divorce filings.

 

Patricia Cohen alleged her ex-husband was later investigated by the Securities and Exchange Commission in 1986 and declined to produce some documents, citing his Fifth Amendment right against self-incrimination.

 

The lawsuit alleged Steven Cohen's statement to the court in regard to their divorce proceedings in 1988 "was materially false and misleading," including failing to disclose a bank account in Miami and that SAC Trading was an active entity.

 

She also said a later affidavit Steven Cohen filed in the divorce in 1991 was false and misleading.

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Anyone ever read Den of Thieves about Mike Milken and Drexel?  That case was built by a series of small dominoes and pressure from various directions. Between the FFH lawsuit, this lawsuit, the Galleon Case, I think there is blood in the water. Now it is just a matter of uncovering smaller crimes in discovery and offering immunity to those who committed them. Mr. Cohen isn't looking so Teflon all of a sudden

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Guest ValueCarl

As importantly, there is a "negative feedback loop" developing which permeates inside his workplace den where employees come every day feeling his stress, in addition to their business relationships and extensions who become "on guard" by "default" for fear of the negative ramifications which are tied to doing business with this criminal enterprise. People begin making mistakes, and mistakes "compound rapidly" in such environments. 

 

Stevie Cohen has gotten too big for his britches. It's time to witness those britches cut down to size when measuring the utter impossibility of almost flat "30 percent after fee" compounding annual returns with a 50 percent "out performance" fee structure as part of that return! 

 

How that weasel, Ron Insana, managed to find cover again, would also be an interesting story if uncovered. He knows Stevie Cohen well! 

 

It will be nice to see Stevie make his way to "The Big House" with Madoff, and parts of the organized crime families they are members of.   

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In that way, I'm kind of disappointed in Buffett and how much he goes on CNBC.  Friggin' Joe Kernan with his rotten toupee is probably one of the worst business journalists I've seen, and he asks the dumbest questions of Buffett.  I remember Kernan, David Faber and Carl Quintanilla sitting around a table saying silly things like is Overstock.com even around anymore...is Byrne even relevant...etc.  I couldn't believe the stuff I was hearing.  That was before the naked shorting stories hit the fan and became common knowledge.  Cheers! 

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 Friggin' Joe Kernan with his rotten toupee is probably one of the worst business journalists I've seen, and he asks the dumbest questions of Buffett.  

 

Agreed.  It's almost like the questions are an afterthought so he can monopolize/waste WEBs time or something similarly strange.  I've seen WEB get a little short with him at times, which of course speaks to the infinite patience of WEB!

 

 

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Guest ValueCarl

I have always "smelled" from Smurf Head, Kernan, having made the cut on cnbc had something to do with his golf game, but I could be wrong.

 

Other than that, he's an empty head.

 

However, if it is a toupee he is wearing, it's a damn good one, and I might look towards his hair stylist!  ;D 

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