From Forbes: After decades of whispers that Stevie Cohen and SAC Capital were engaging in insider trading, the Securities and Exchange Commission has now sent a Wells notice advising the firm that the SEC is planning to bring a case against them.
As a result of the SEC’s action, we will now see whether
SAC, one of the most closely watched hedge fund operations on the Street, was
making 20% to 30% annual returns through all markets as a result of superior
business acumen or whether they were profiting illegally from inside
information.
This case will answer two burning questions: A. Is the SEC
under a new chairman really going to go after the “biggest fish” on Wall
Street? Or, will it simply engage in a wrist slap fine in which SAC and Cohen
would provide some “chump change” to the government? B. Will this case show
that Cohen and SAC are really smarter than the market and everyone else? Or did
they have an unlawful edge in trading stocks based on inside information?
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