Sen. Elizabeth Warren (D-Mass.) condemned the Securities and Exchange Commission for failing to stop billionaire Steven Cohen from playing a key role in starting a new hedge fund just months after the agency chastised him for failing to properly supervise a former employee accused of insider trading, the Washington Post reported today. Federal prosecutors had long suspected that the stellar returns at Cohen’s famed hedge fund, SAC Capital, were too good to be true. In 2013, SAC Capital, which once had $15 billion in assets, agreed to pay $1.2 billion to settle charges that it tolerated rampant insider trading. But connecting Cohen, one of the richest people on the world, directly to those misdeeds proved difficult. Instead, the Securities and Exchange Commission reached a settlement with Cohen in January that prohibited him from managing other people’s money until 2018 — essentially barring him from the industry that had made him famous. But just a few months later, Cohen took part in an effort to start a new hedge fund, Stamford Harbor Capital. Cohen owns more than 25 percent of the firm, according to documents filed with the Securities and Exchange Commission. “This is an unacceptable outcome from the nation’s primary enforcer of securities laws, and it is the latest example of an SEC action that fails to appropriately punish guilty parties, deter future wrongdoing, and protect investors,” said Warren.
