Comments on: The SEC’s important case against Stevie Cohen http://blogs.reuters.com/felix-salmon/2013/07/21/the-secs-important-case-against-stevie-cohen/ A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: site http://blogs.reuters.com/felix-salmon/2013/07/21/the-secs-important-case-against-stevie-cohen/comment-page-1/#comment-53259 Sun, 28 Sep 2014 18:31:52 +0000 https://blogs.reuters.com/felix-salmon/?p=22282#comment-53259 It’s a pity you don’t have a donate button! I’d certainly donate to this fantastic blog! I guess for now i’ll settle for bookmarking and adding your RSS feed to my Google account. I look forward to brand new updates and will talk about this blog with my Facebook group. Talk soon!

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By: y2kurtus http://blogs.reuters.com/felix-salmon/2013/07/21/the-secs-important-case-against-stevie-cohen/comment-page-1/#comment-47698 Tue, 23 Jul 2013 01:17:12 +0000 https://blogs.reuters.com/felix-salmon/?p=22282#comment-47698 While the government can show a clear pattern of abuse by at least 3 of his 300 investment professionals, he can dump reams of legally justifiable securities research of why they entered and exited every one of tens of thousands of positions.

In my view this gets back to the difference Felix often points out between US and UK laws:

Did Cohen violate the spirit of the law by hiring well connected individuals, strongly encourage them to use and even create expert networks which by their nature were on the edge of the law while at the same time force them to sign ironclad code of conduct contracts swearing never to use insider information. Absolutely he violated the spirit of the law.

When you get to the technicalities none of it sticks to him. After reading the complaint I think he’ll walk if he is tried by a jury of his peers.

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By: dWj http://blogs.reuters.com/felix-salmon/2013/07/21/the-secs-important-case-against-stevie-cohen/comment-page-1/#comment-47697 Mon, 22 Jul 2013 13:51:55 +0000 https://blogs.reuters.com/felix-salmon/?p=22282#comment-47697 I wonder whether, if he’s fined, he’ll be able to claw back commissions from the employees responsible for the trades that looked profitable at the time but proved very, very costly.

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By: william117 http://blogs.reuters.com/felix-salmon/2013/07/21/the-secs-important-case-against-stevie-cohen/comment-page-1/#comment-47696 Mon, 22 Jul 2013 12:12:37 +0000 https://blogs.reuters.com/felix-salmon/?p=22282#comment-47696 The set up it one that provides protection to the QB. Cohen is aware of everything going on, he sets the tone everyone working with him all have their eye on the same ball , make all you can ,play on the edge , do not get caught , protect the firm and especially the boss. No different than most organizations , the players know what is accepted what not to run by the boss. The boss knows the climate and avoids asking some questions ,which is part of his own protection.
The SEC has no choice , they must go right to the top or look completely ineffective

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By: rlindsl http://blogs.reuters.com/felix-salmon/2013/07/21/the-secs-important-case-against-stevie-cohen/comment-page-1/#comment-47692 Mon, 22 Jul 2013 08:07:15 +0000 https://blogs.reuters.com/felix-salmon/?p=22282#comment-47692 It is really difficult to reconcile Cohen’s value to anything positive. Forget the technical and legal aspects of this particular case. This is skimming. No value is added. The concept of market liquidity is spin. Black edge? Wow the rebranding of pure cheating, insider trading, is loathsome in and of itself. Let’s do this, tax “traders” at 79% and forget the oversight and prosecution.

The planet is overdue for a de-worming.

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By: realist50 http://blogs.reuters.com/felix-salmon/2013/07/21/the-secs-important-case-against-stevie-cohen/comment-page-1/#comment-47691 Mon, 22 Jul 2013 02:19:30 +0000 https://blogs.reuters.com/felix-salmon/?p=22282#comment-47691 Ken – I am not an attorney, so take my perspective with a grain of salt.

Regarding the basic question, “could the SEC come after you under the same failure to supervise provision as Cohen”?, the answer is no. The complaint against him is under the Investment Advisers Act of 1940, which only applies to those managing 3rd-party money. That wouldn’t apply to you since you shouldn’t need to be a registered investment advisor to manage your own money. I also believe that a manager of third-party money has to meet a higher legal standard regarding regulatory compliance with all securities laws – not just insider-trading law – than someone in the position that you describe.

That said, there’s a lot of caveats to which I don’t know the answer. Would there need to be a firm that’s a registered investment advisor somewhere in the chain to employ these people hired to manage your money, or can you just hire them directly? If you just hire them directly, do you face other sorts of civil liability such as a greater presumption that everything that they do is on your behalf? (The latter being similar to the way that companies face civil liability for the actions of their employees.) At a minimum, I think – though I’m not certain – that it would be fairly easy for the government to win a civil case forcing you to disgorge any profits from insider trading done under this arrangement.

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By: BryanWillman http://blogs.reuters.com/felix-salmon/2013/07/21/the-secs-important-case-against-stevie-cohen/comment-page-1/#comment-47690 Sun, 21 Jul 2013 17:18:53 +0000 https://blogs.reuters.com/felix-salmon/?p=22282#comment-47690 You want to define “black edge” a little better?

Do you mean “insider trading” only?

Or is “the trader understands this better than others for some special but legal reason” included in this same idea?

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By: KenG_CA http://blogs.reuters.com/felix-salmon/2013/07/21/the-secs-important-case-against-stevie-cohen/comment-page-1/#comment-47689 Sun, 21 Jul 2013 16:12:33 +0000 https://blogs.reuters.com/felix-salmon/?p=22282#comment-47689 So let’s say I have $5 billion is assets that I made by selling some company, and I don’t want to spend much time figuring out how to manage or grow that pile of wealth. So I hire a couple dozen or so advisers, allowing each of them to invest hundreds of millions of dollars, and I ultimately allocate the largest amounts of money to the best ones. They tell me who they are speculating in, but they don’t get into the details. Am I guilty of not supervising them if one or more of them uses inside information to enhance their performance (we have PEDs for athletes, maybe we should call inside information PEI)? How is that different from what is happening to Cohen?

I’m not defending those who use private information to beat the system, I just don’t think it’s the biggest crime in the financial industry. It’s great for headlines, and for creating the illusion that the government is doing something for the “little guy”, but it’s really just shuffling deck hairs on the Titanic.

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