By Jennifer Ablan
Steven A. Cohen, one of the world’s most successful and secretive billionaire hedge fund managers, shared some of his thinking on insider trading, something his worst critics have alleged SAC Capital knows a thing or two about.
Cohen in sworn deposition testimony earlier this year, an extended excerpt of which was obtained by my prolific colleague and partner-in-crime Matthew Goldstein, said: ”The way I understand the rules on trading on inside information, it’s very vague.”
Cohen added: “It’s my belief that the idea of material nonpublic informing could be interpreted differently, depending on which side of the transaction you’re on.” At one point, the 55-old-trader loses his cool a bit with Fairfax’s lawyer, Michael Bowe, commenting: “Well, you know, we’re having this conversation for about three hours about what’s material and whatnot. It’s pretty clear that you and I have a different view on it.”
Cohen’s deposition testimony in February and April this year was part of a long-running civil lawsuit filed by Canadian insurer Fairfax Financial, which we reported on exclusively here.
The 600-plus pages of testimony makes for fascinating reading. Cohen goes on to define the term “edge” and provides a window into his web of contacts including DanielLoeb, the American hedge fund manager and founder of Third Point LLC.