After nearly a decade of investigations by securities regulators after accusations of insider trading, Steven A. Cohen will be able to manage outside money in two years.
Although federal prosecutors originally called for a rare lifetime ban, Cohen reached a settlement with the Securities and Exchange Commission. Cohen was formally charged with failing to adequately oversee an employee.
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The settlement clears the way for Mr. Cohen, who is 59, to return to the hedge fund business, where his ability to mint money trading stocks has been envied for decades. One of the richest men on Wall Street, Mr. Cohen is also an active art collector known for buying pieces by Damien Hirst and Jeff Koons.
“Resolving the case gives us certainty and opens the path to raising outside capital,” Mr. Cohen wrote in a memo on Friday to his employees, which was reviewed by The New York Times.
The road back has come at a cost, however.
During the years when his former firm, SAC Capital Advisors, was under investigation by prosecutors, some top traders left and legal costs mounted. Mr. Cohen’s reputation, on Wall Street and more widely, was tarnished as some questioned how he had outperformed the industry for so many years.
In 2013, SAC Capital pleaded guilty to insider trading charges and paid a record $1.8 billion penalty. In pleading guilty, the hedge fund had to return outside money to investors.
SAC Capital posted high profits in 2015 despite many other prominent hedge fund firms reporting large losses.
Photo by Sue Waters via Flickr CC License
