Unstructured Finance

By Matthew Goldstein and Svea Herbst-Bayliss

The WSJ is out today with a big story saying Stevie Cohen and SAC Capital are bracing for up to $1 billion in redemptions, or roughly 16 percent of the $6.3 billion it manages for outside investors. That’s a lot of money but sources are telling us redemptions will likely come in lower than that—think more in the $500 million range.

And more important, no matter what the figure is, don’t look for it to put much crimp in Cohen’s operation.

The deadline for submitting redemptions is Feb. 15, so there is still plenty of time for outside investors make a decision about sticking around or leaving. And even if an investor puts in a redemption notice now, those requests to withdraw money can get pulled at the last minute if the investor has a change of heart.

So far, the most notable redemption request comes from Titan Advisors, the investment fund run by George Fox, a friend of Cohen. Titan, as we noted has been pulling money from big funds for a while, so the decision may be motivated as much by the latest headlines in the insider trading investigation as much as a strategic shift by the investment firm.

Titan, which had been with Cohen for many years, is believed to have had between $75 million and $150 million with SAC Capital, sources say.  Titan hasn’t yet sent investors  a year end letter formally explaining its rationale for bailing on SAC Capital.

By Matthew Goldstein and Jennifer Ablan

In the end, one of the more memorable takeaways from the Steve Cohen deposition we unearthed is the feud between the lawyers over what to call the billionaire hedge fund manager: “Stevey” or “Mr. Cohen.”

Bess Levin at Dealbreaker.com used a her unique wit to deconstruct the verbal dispute between Cohen attorney Marty Klotz and Fairfax Financial lawyer Mike Bowe.  And now CNBC’s David Faber weighs in with his own retelling of the verbal jousting. (see video clip here).

And yes, we agree with Squawk on the Street host Melissa Lee that we need to see a visual reenactment as well–since it’s unlikely anyone is going to get the videotaped version of the deposition anytime soon. But we’ll try.

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.”