STOCK MARKET WATCH -- Monday, 1 April 2013

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28. Cohen Eludes U.S. as Latest Case Is Short on Evidence

http://www.bloomberg.com/news/2013-03-31/sac-siege-by-u-s-seen-slowing-in-steinberg-s-indictment.html

Looks can be deceiving when it comes to assessing the U.S. criminal investigation of SAC Capital Advisors LP founder Steven A. Cohen.

Federal prosecutors have enjoyed a steady drumbeat of indictments over the past few years, punctuated by headline- grabbing 6 a.m. knocks at the door as Federal Bureau of Investigation agents arrest the latest member of the inner circle of the $15 billion hedge fund.

The insider trading indictment last week of SAC fund manager Michael Steinberg, a 16-year veteran of the firm, involved the most senior member of Cohen’s firm charged so far. The splash of his Good Friday arrest followed the charges last year of SAC portfolio manager Mathew Martoma, bringing to nine the number of current or former SAC traders or analysts linked to illegal trades.

That’s a sizable universe of people who could potentially incriminate Cohen. Yet the closest prosecutors have gotten so far to implicating Cohen himself occurred in Martoma’s case, which involved an alleged 20-minute conversation Martoma had with Cohen about health stocks. The firm netted $276 million on those stocks, trading on illegal tips Martoma got, according to prosecutors. But no evidence was put forth that Cohen, who denies any wrongdoing, knew the tips were improperly obtained.