Business

Is troubled hedgie Steve Cohen getting back in the SAC?

Former hedge-fund kingpin Steve Cohen may eventually be able to manage outside money again, according to a report.

A recent appeals court decision that the government says “threatens the effective enforcement of the securities law” might pave the way, legal experts said.

Cohen last year shut down his SAC Capital Advisors hedge fund — which once had $16 billion under management — as part of a deal that forced the firm to plead guilty to several counts of securities fraud and pay $1.8 billion to the feds.

But people inside his new family office, Point72 Asset Management, are more confident that the Securities and Exchange Commission will allow him to manage investor money again, according to Bloomberg.

A final decision from the SEC, which initially said it wanted to ban Cohen from the hedge-fund industry for life, has been on hold pending the outcome of an appeal of two hedge-fund managers’ convictions on insider trading.

Cohen is facing a “failure to supervise” charge from the SEC, based on the fact that several former employees have been convicted of insider trading.

Some non-SAC-related hedge-fund convictions were overturned in December, putting the guilt of at least one of SAC Capital’s top portfolio managers, Michael Steinberg, in question.

Preet BhararaAP

On Friday, Manhattan US Attorney Preet Bharara asked an appeals court to reverse the overturned convictions, leading to a possible US Supreme Court showdown over the new insider-trading standard the decision has created.

If it stands, the government said it will be “dramatically” limited in prosecuting “some of the most common, culpable and market-threatening forms of insider trading.”

Cohen’s new firm threw cold water on the idea that he wants to return to the hedge fund world. “There have been no internal discussions about any settlement,” a spokesman said. “We have no plans to seek outside capital — we enjoy being a family office.”

The firm has made no overtures to the government, according to individuals close to the matter.

Despite Cohen’s departure from the hedge-fund industry, he still ranks as one of the “world’s greatest money managers,” according to a report released Monday.

His SAC Capital/Point72 ranked 10th for 2014, up a notch from the prior year, the report by famed hedge-fund investor Rick Sopher of London-based LCH Investments said.

After being forced to return investors’ capital last year, Point72 held $10.8 billion of Cohen’s personal wealth and earned $1.6 billion, or 10 percent, which is below the average annualized return of 25 percent of SAC.