Bloomberg News

SAC Reconsidering Relationship With Deutsche Bank, WSJ Reports

December 12, 2013

SAC Capital Office

Signage stands outside the offices of hedge fund SAC Capital Advisors LP in Stamford, Connecticut. Photographer: Rick Maiman/Bloomberg

SAC Capital Advisors LP may curtail dealings with Deutsche Bank AG (DBK) because the German lender pulled a credit line after the hedge-fund firm was accused of insider trading, the Wall Street Journal reported.

As part of a restructuring in the wake of the criminal case, SAC is examining its ties with some Wall Street banks that help finance and manage its trades, the newspaper wrote, citing unidentified people familiar with the matter. Deutsche Bank’s decision irritated SAC officials, and the prime-brokerage relationship is among those under review, the Journal said, citing people with knowledge of the companies’ talks.

SAC’s billionaire founder, Steven A. Cohen, is rebuilding the company into a “family office” that will manage his and employee money only. The Stamford, Connecticut-based hedge-fund firm may change its name as part of the overhaul, the Journal said. SAC will probably keep relationships with Goldman Sachs Group Inc., JPMorgan Chase & Co. (JPM:US) and Morgan Stanley (MS:US), which handle most of its prime-services business, the newspaper said.

Jonathan Gasthalter, a spokesman for SAC Capital at Sard Verbinnen & Co., declined to comment on the deliberations. Renee Calabro, a spokeswoman at Frankfurt-based Deutsche Bank, also declined to comment.

SAC pleaded guilty to charges Nov. 8 as part of a record $1.8 billion settlement of the government’s investigation into insider trading at the firm. The fund agreed to close its investment advisory business as part of the accord to end both its prosecution and a money-laundering lawsuit filed by the Justice Department. The federal judge presiding over the criminal case hasn’t decided whether to accept the plea.

The criminal case is U.S. v. SAC Capital Advisors LP, 13-cr-00541, U.S. District Court, Southern District of New York (Manhattan). The civil case is U.S. v. SAC Capital Advisors LP, 1:13-cv-5182, U.S. District Court, Southern District of New York (Manhattan).

To contact the reporter on this story: David Scheer in New York at dscheer@bloomberg.net

To contact the editor responsible for this story: Peter Eichenbaum at peichenbaum@bloomberg.net


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