Jordan A. Thomas comments on SEC settlement with SAC Capital
The settlement is a humbling end to one of the government’s most high-profile cases. The allegations against billionaire Steven A. Cohen weakened last year when prosecutors were forced to drop its case against former SAC Capital employee, Michael Steinberg. Steinberg, a longtime Cohen confidant, had been found guilty of trading on illegal tips involving technology stocks. But prosecutors abandoned that case and several others after an appeals court decision made it more difficult for authorities to purse certain kinds of wrongful trading cases.
For a while, the Securities and Exchange Commission (SEC) appeared poised to continue to pursue Cohen by focusing on his alleged failure to supervise another employee, Mathew Martoma, who was convicted last year of what prosecutors described as the most lucrative insider-trading scheme. Martoma is appealing his conviction and Cohen did not acknowledge wrongdoing in the settlement.
“Insider trading cases have always been difficult to make, but with the [appeals court ruling], the SEC was dealt an incredibly tough hand, and the deal with Cohen is probably the best it could have hoped for under the circumstances,” said Jordan Thomas, a partner at Labaton Sucharow and a former Justice Department trial lawyer.