Bloomberg News

SAC Says Cougar Investment Was Based on Public Information

October 20, 2011

(Adds report of takeover target in fifth paragraph.)

Oct. 20 (Bloomberg) -- SAC Capital Advisors LP, the $14 billion hedge fund run by Steven A. Cohen that’s being investigated by regulators for insider trading, said it’s investment in Cougar Biotechnology Inc. before the company was bought by Johnson & Johnson in 2009 was “perfectly reasonable” and based on publicly available information.

“We have not been contacted by any regulatory authority related to this matter, but we would of course cooperate should there be an inquiry,” Jonathan Gasthalter, a spokesman for the Stamford, Connecticut-based firm, said in an e-mailed statement today.

The U.S. Securities and Exchange Commission is examining trades in Cougar by SAC and other hedge funds to determine if they profited from inside information of the takeover, the Wall Street Journal reported today, citing people familiar with the matter.

SAC Capital, which hasn’t been charged with any wrongdoing, bought 400 shares in Los Angeles-based Cougar in the fourth quarter of 2007 and built up its stake to 632,291 shares by the first quarter of 2009, according to government filings. Cougar was bought by New Brunswick, New Jersey-based J&J in July of that year.

Cougar was subject to speculation that it would be a takeover target since at least November 2008 when Merger Market, a Web-based news service, said that it may be bought.

The SEC is investigating whether Leerink Swann LLC, a Boston-based investment bank that runs an expert-network consulting firm, leaked nonpublic information to traders, the Journal said. Such firms connect investors with industry professionals. Joseph Gentile, a spokesman for Leerink, wasn’t immediately available for comment.

--Editors: Steven Crabill, Larry Edelman

To contact the reporter on this story: Saijel Kishan in New York at skishan@bloomberg.net

To contact the editor responsible for this story: Christian Baumgaertel at cbaumgaertel@bloomberg.net


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