Steven Cohen in his own words
By Matthew Goldstein and Jennifer Ablan
The thing about deposition excerptsâ€”even lengthy onesâ€”is that some of the tantalizing material gets left on the cutting room floor. And thatâ€™s certainly the case with hedge fund billionaire Steve Cohenâ€™s two-days worth ofÂ testimony in the long-running Fairfax Financial litigation.
Now donâ€™t get us wrongâ€”there is plenty of great and illuminating stuff in the 242 pages of deposition testimony Reuters obtained through a court motion to unseal documents in the civil lawsuit. As we noted in our story, Cohen is pressed at great length for his views on insider tradingâ€”he thinks the laws are â€śvagueâ€ť. And as we highlighted in our blog, thereâ€™s even an amusing little feud between the lawyers over how the SAC Capital founder should addressed.
Still, it makes you wonder what was said by Cohen in the more than 400 pages of deposition transcript that wasnâ€™t unsealed. And weâ€™d love to see Cohen on videotape as sometimes body language can be revealing.
One of the more intriguing tidbits in the deposition is a very brief line of inquiry by Fairfaxâ€™s lawyer about whether Cohen had an early discussions in September 2008 about the Federal Reserveâ€™s plan to backstop the commercial paper market. The Commercial Paper Funding Facility, or CPFF, was one of the most important steps taken by the Federal Reserve to keep liquidity following in the financial system after the collapse of Lehman Brothers.
Indeed, between July 2007Â and the failure of Lehman Brothers, the relative use of commercial paper fell 10 percentage points, according to a research paper by the Federal Reserve Bank of Dallas. The Fedâ€™s CPFF program, which was announced in October 2008, â€śhelped prevent commercial paper from imploding by as much as it did in the 1930s,â€ť the paper added.
When asked by Fairfax’s lawyer if he or someone on his team was given a heads up on the CPFF, Cohen responds, â€śI donâ€™t remember that.â€ť He then goes on to say, â€śIâ€™m not a credit person.â€ť (see page 352 of transcript)
The line of questioning appears to have continued but itâ€™s not in the excerpted transcript obtained by Reuters. Maybe nothing more came of it, given Cohen said he didnâ€™t know anything about it.
But in the wake of a Bloomberg story revealing that former Treasury Secretary Hank Paulson, in summer 2008, may have discussed some of his thoughts about Fannie and Freddie with a group of hedge funds, it makes youÂ wonder about the flow of information between government officials and big money traders.
Anyway, we know many of you have been asking for the transcript.
So here it is in an easy to use link. Happy reading.
And as a bonus read, here is a link to the 2002 version of SAC Capital’s “Statement of Policies and Code of Ethics and Conduct.”