The Securities and Exchange Commission announced the settlement of the long-running case on Friday. Cohen wasn’t fined under the agreement, and neither admitted nor denied the SEC’s allegations.
Federal prosecutors had accused SAC Capital, one of the biggest and most successful hedge funds, of engaging in illegal insider trading on an epic scale while its founder and owner Cohen enabled the misconduct.
SAC agreed in 2013 to plead guilty to criminal fraud charges and to pay $1.8 billion. It was the largest financial penalty at the time for insider trading, according to prosecutors. Cohen himself never faced criminal charges.
Cohen, who lives on a sprawling estate in Greenwich, Connecticut, is one of the highest-profile figures in American finance and one of the country’s richest men. He has been among the handful of upper-tier hedge fund managers who pull in about $1 billion a year in compensation. He founded SAC in 1992 and carved a reputation as a savvy investment manager.
In the settlement with the SEC, Cohen was banned until 2018 from managing outside money or supervising others in the financial industry. In addition, Cohen’s current firm — which replaced SAC and only mainly invests Cohen’s personal fortune — was required to submit to SEC inspections and to hire an independent consultant to monitor its compliance with securities laws.
“Before Cohen can handle outside money again, an independent consultant will ensure there are legally sufficient policies, procedures and supervision mechanisms in place to detect and deter any insider trading,” SEC Enforcement Director Andrew Ceresney said in a statement.
SAC, based in Stamford, Connecticut, managed an estimated $15 billion in assets at one point in 2013.
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