SAC Against the Ropes
It's been a rough couple of weeks for Stevie Cohen and his crew, and the situation is growing more "fluid" with each passing day. I kinda kept one eye on it all weekend after the somewhat cryptic announcement on Friday that SAC would no longer be "fully" cooperating with the government's investigation into insider at the fund.
Then came the announcement that Cohen himself had been subpoenaed, and the previous announcement was interpreted to mean that he planned to take the Fifth rather than testify before a grand jury.
Now the rumor is that Cohen may be cutting a deal with the feds that would close the fund to outside investors altogether. This deal would include an admission of guilt on the part of in exchange for deferred prosecution (meaning no criminal liability unless the firm were to break the law again).
Predictably, outside investors are already jumping ship and to they're extending their redemption period to allow investors to get out. In perhaps a sign of things to come, Blackstone is pulling at least some of their money out of SAC. That's gotta be especially disheartening for the guys at , not only because is their biggest outside investor but also because was one of their staunchest supporters.'s credit,
It's hard to say what's going to ultimately happen at this point. If the government goes hard in the paint they may try to take Cohen down criminally. I'd say that was highly unlikely if it were any prosecutor other than Preet Bharara, but he really seems to have it in for Cohen.
Any way you slice it, it's a bad deal for the crew over at. Even if some sort of deal is reached and has to close to outside investors, it's going to mean a bunch of guys looking for work.
If anyone has any further insight into what might be going on, I'm all ears.