SAC Capital Advisors LP, the $14 billion hedge fund run by Steven A. Cohen, plans to hold a conference call with clients tomorrow following the arrest last week of a former portfolio manager, according to investors who asked not to be named because the information is private.
SAC executives have already reached out to the firm’s largest investors to calm concern about Cohen’s trading in Elan Corp. (ELN:US) and Wyeth LLC after prosecutors for the first time tied the hedge-fund founder to a specific transaction at the center of an insider-trading investigation. SAC told the clients that its compliance procedures are robust and that the firm is cooperating with the investigation.
Mathew Martoma, the former portfolio manager at the firm, was arrested on Nov. 20 for allegedly trading shares of Elan and Wyeth based on inside information. Investors, who asked not to be named because the fund is private, are much more concerned about last week’s charges than previous ones because Cohen, according to a criminal complaint, traded those shares in his own portfolio and discussed them with Martoma.
Jonathan Gasthalter, a spokesman for the Stamford, Connecticut-based firm, declined to comment on plans for a conference call.
Last week’s charges mark the sixth time a current or former employee was linked to insider trading while working at the company. Prosecutors say SAC, one of the best-performing hedge funds, reaped $276 million in profits and averted losses after Martoma used inside information from a clinical trial to trade in shares of the two health-care companies in 2008.
Cohen, who wasn’t mentioned by name in last week’s complaint and hasn’t been accused of any wrongdoing, is the hedge-fund owner and investment manager referred to in the criminal complaint and a related civil case filed by the U.S. Securities and Exchange Commission, according to a person familiar with the matter.
“Mr. Cohen and SAC are confident that they have acted appropriately and will continue to cooperate with the government’s inquiry,” Gasthalter said last week.
The criminal case is U.S. v. Martoma, 12-MAG-2985; and the civil case is SEC v. CR Intrinsic Investors LLC, 12-8466, U.S. District Court, Southern District of New York (Manhattan).
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