By Matthew Goldstein and Jennifer Ablan
The thing about deposition excerpts—even lengthy ones—is that some of the tantalizing material gets left on the cutting room floor. And that’s certainly the case with hedge fund billionaire Steve Cohen’s two-days worth of testimony in the long-running Fairfax Financial litigation.
Now don’t get us wrong—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 trading—he thinks the laws are “vague”. And as we highlighted in our blog, there’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 wasn’t unsealed. And we’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 Fairfax’s lawyer about whether Cohen had an early discussions in September 2008 about the Federal Reserve’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 2007 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 Fed’s CPFF program, which was announced in October 2008, “helped prevent commercial paper from imploding by as much as it did in the 1930s,” the paper added.