Senator Elizabeth Warren attacked the Securities and Exchange Commission. She criticized SEC's decision to allow Steven Cohen back to hedge fund business by approving the registration his new investment advisory firm.
Democratic senator from Massachussets Elizabeth Warren wrote a letter to SEC on Thursday questioning decision to allow Steve Cohen back to hedge fund business. Wall Street Journal reported she insisted the decision is an unacceptable outcome from SEC as the primary enforcer of securities laws.
"The Commission has permitted a recidivist hedge fund manager, well-known for his former company's willingness to evade and ignore federal law, to once again profit from - and potentially exploit - investors," her letter said. "It is the latest example of an SEC action that fails to appropriately punish guilty parties, deter future wrongdoing, and protect investors,"
Steven Cohen is a hedge fund manager who founded and managed one of the most profitable hedge-fund firms in the US, SAC Capital Advisors LP. and Point72 Asset Management. According to Reuters, Cohen was implicated in an insider trading scandal at a unit of SAC in 2012. In January, SEC and Steve Cohen reached a settlement to prohibit Cohen from serving in supervisory role at any broker, dealer, or investment adviser until 2018.
Recently, SEC approved the registration of Stamford Harbor Capital Management L.P., a new investment advisory firm which was founded by Cohen. The decision sparked anger from senator Warren who demanded answer from SEC on the decision and provide "a briefing on the decision to approve Stamford Harbor as a money manager for outside clients; and a complete list and additional explanatory information on any other individuals or firms who, like Mr. Cohen, were barred from managing funds (or barred from other activities by SEC) yet are presently indirectly involved in those activities with SEC registered entities."
In response to her concern, a spokesman at Point72 spokesman provided a statement to MarketWatch, "The SEC imposed clear conditions in the settlement. We are not going to manage one dollar of outside money prior to January 1, 2018. We are fully meeting and continue to meet the letter and spirit of the agreement."
Director of Division of Enforcement director at SEC Andrew Ceresney said in a statement that SEC vow to protect investors. As a law enforcement agency, the agency has given additional oversight to Steve Cohen's activities which even stronger that typical oversight under the securities law.
"Under the settlement's significant requirements, the SEC will scrutinize his trading activity closely going forward to protect investors," Mr. Ceresney said.
In regard to the decision to approve Steven Cohen's new investment advisory firm, senator Elizabeth Warren blasted the Securities and Exchange Commission. However, the firm said that it will not manage any outside money.
