First Chicago, now London. SAC Capital has announced it will close its London office by year-end as a result of the ongoing insider trading investigation. SAC President Tom Conheeney delivered the news to the London employees in person, which was a class act we don't often see in this business anymore (nowadays you just get an email). For those who think the proposed settlement and rumored billion-dollar fine are no big deal, you've got another think coming:
"As our negotiations with the government have unfolded, it has become clear to us that the outcome the government is demanding is likely to have a greater than first anticipated impact on the firm," Conheeney wrote in the memo, a copy of which was obtained by Reuters. "We have concluded that we must operate as a simpler firm and reduce our capital allocations."He said the decision to close the office "was not something we had been contemplating."
We're literally down to the wire on the negotiations now, and a deal could be announced any day. My personal speculation is that the only thing left to negotiate will be whether or not Cohen will ever be allowed to manage outside capital again. No matter what the final settlement looks like, I think we can expect the DOJ to spike the ball in the endzone on this one.
It's unfortunate for the London crew (and potentially unfortunate for the entire SAC crew if the DOJ is successful in gelding Cohen), but it's the nature of the biz these days.
I get the feeling that the screw-ups of a few bad actors at any given firm are going to have a larger and larger impact on their organization as a whole going forward, and that doesn't bode well for junior guys (who really have no control over anything). Best thing I can advise is to be on the lookout for shady shit and be ready to jump ship if and when you see it.
So what's the over/under on Stevie getting a lifetime ban?
and yet, the real crooks like that despicable Corzine still walks around swinging his dick with the DOJ on the other end.
True dat.
Exactly. Makes me sick.
Is it really a few bad actors? My impression of the hedge fund game is that insider trading is a lot more prevalent than you might think, I have a few friends who work at hedge funds and they seem to think the upper level guys all do it.
I feel bad for the worker bees at SAC.
@ST Monkey I guess Uncle Sam only goes after guys who benefit their clients, but if you screw them royally like MF Global and Corzine, it's a different story. That's all I can take away from this.
Corzine is directly connected to Bill Clinton and the upper echelons of the Democratic party. Why did you think a former FBI director, Loius Freeh, was called in to help sort out the mess? The company's holdings of Euro debt at that particular time could have added to the crisis, that's definitely a huge factor, but this is political plutonium. While the GOP is still strangely fixated on Benghazi, they're not taking advantage of a REAL political scandal. The GOP is playing political football with Benghazi because they can...it's the nexus point of arming Syrian resistance groups so they know the administration will stonewall them. Meanwhile, J-Corz is walking around making everyone look like an asshole. "I have no recollection of that conversation"....BULLSHIT
As for a few bad apples ruining it for the rest of us: I can't speak from experience about insider trading on the buyside. As far as the sell side, yes, it really is the case that a few jerks really have made life harder for the rest of us. The LIBOR scandal is probably, all in, the result of a few dozen people at most. The housing CDO scandal was less than a few thousand. Madoff and crew totalled under 20. The London Whale thing was probably a dozen people, maybe less. Magnetar was a tiny tiny shop. Pualson is just one guy and the GS structurers who helped him are a very small team. And so on. Meanwhile, everyone in industry now lives in the shadow of their error. It's the reason why I've favored such harsh punishments of individuals and firms that screwed up....why the hell should I pay for their mistakes? THAT is socialism and redistribution if anything. It's not anti business to enforce the rules and punish major transgressions, it's essential to our survival. Even John Mack said "we need good regulation, we can't stop ourselves." It still kind of baffles me that some wannabe-hardcore-20something-conservative loses his shit when I say this but yeah, if you commit fraud and theft while working at a bank, you should get the book thrown at you. Ever been to a hockey game with a crooked ref? At least in hockey I can 'accidentally' whack him in head, but working in a business environment where one side has the ref in their pocket is downright enfuriating. I'm inclind to think that anyone who disagrees with me is probably a crook themselves....who else would expect me to put ideology above the bottom line in business?
Eddie, you have probably fractured a rule or two in your day, as have we all, but I see you as being a guy who actually earned his money. What do you think happened at SAC? Is this as bad as they're saying?
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