SAC Capital: Firm Criminal Liability, Civil Fines, and the Insulated CEO

Abstract

SAC Capital Advisors LP (SAC) was once a $12-billion hedge fund with one of Wall Street’s best records for performance. Steven A. Cohen, the owner and namesake of SAC, was the subject of admiring profiles in everything from the New York Times to Vanity Fair. He was once number 36 on Forbes’ list of richest Americans worth an approximated $11 billion, Cohen was called “the king of hedge funds.” Mr. Cohen received attention for his art collection (valued at $1 billion) and his 30-room mansion in Connecticut. However, there was building attention focused on SAC for two very simple reasons: (1) How did the hedge fund outperform every other fund?; and (2) Why were so many current and former SAC traders being indicted, convicted, or entering guilty pleas to insider trading?

Keywords: SAC Capital, Civil Fines, Criminal Liability