Societe Generale SA’s (GLE) Lyxor Asset Management unit has asked to withdraw its clients’ funds from Steven A. Cohen’s SAC Capital Advisors LP, a person with knowledge of the situation said.
Lyxor’s investments with SAC are very limited, said the person, who asked not to be identified because the matter is confidential. Officials for Lyxor and Societe Generale in Paris declined to comment, while a spokesman for Stamford, Connecticut-based SAC didn’t answer the phone outside of business hours. The Wall Street Journal reported on Lyxor’s plans late yesterday.
The U.S. Securities and Exchange Commission told SAC that it is considering suing the $14 billion hedge fund run by Cohen, 56, for fraud involving alleged insider trading by a former portfolio manager who was arrested in November, three people with knowledge of the matter said last month.
SAC received the warning in November, Tom Conheeney, the firm’s president, told investors on a Nov. 28 conference call during which the firm discussed the arrest of the former SAC portfolio manager, Mathew Martoma, on criminal charges of insider trading while at the firm. Cohen, who spoke briefly at the start of the call, said he acted appropriately when he traded shares of two drugmakers four years ago on recommendations from Martoma, according to two of the people.
“Mr. Cohen and SAC are confident that they have acted appropriately and will continue to cooperate with the government’s inquiry,” a spokesman for SAC Capital said last month in an e-mailed statement. Cohen has not been accused of any wrongdoing.
Martoma’s lawyer, Charles Stillman, said in an e-mailed statement last month that he expected Martoma to be fully exonerated.
One investor, who asked not to be named because the fund is private, said he wouldn’t be compelled to pull out his money unless there was a criminal indictment against Cohen, Bloomberg News reported last week.
Clients can only redeem 25 percent of their investment every quarter after giving 45 days’ notice, meaning it would take them a year to redeem in full. The next deadline for putting in a redemption notice is mid-February.
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