The 'I Don't Remember' Files, Part II: Hedge Fund Chief Stevie Cohen
Matt Taibbi, Rolling Stone
Since we already had some fun with one mega-rich yabo with a memory problem earlier this week, it seemed appropriate to shine a light on another "fuzzy memory" story that's come down the pipe.
It seems Stevie Cohen, the oft-maligned hedge fund billionaire who has been whispered about for years on the fringes of various market-manipulation cases, is finally about to have the net thrown over him for his involvement in an insider trading mess centered around two medical companies, Elan and Wyeth. Cohen, it seems, sold off about $700 million in stock in those two firms just days before news leaked out about bad drug trial results that caused those stocks to crater. Cohen allegedly saved himself about $276 million on the trade.
Cohen apparently decided to sell after speaking to one of his fund managers, Matthew Martoma, after Martoma spoke with a doctor who broke the news about the trials for an experimental Alzheimer's drug. After speaking with the doc, Martoma told Cohen he was "no longer comfortable" with his boss's nearly billion-dollar investment (I'll bet he wasn't!). The Financial Times today released a new story, about testimony Cohen reportedly gave to the SEC on the subject earlier this year:
The Securities and Exchange Commission took Mr Cohen's testimony earlier this year, thought to be his first explanation for SAC's trading of shares of Elan and Wyeth that were made days before the companies announced negative clinical drug trial results that sent their stocks tumbling.
People familiar with the interview say Mr Cohen's memory was otherwise vague and that he could recall few details of the content of a 20-minute phone conversation, held in 2008, with Mathew Martoma, the portfolio manager who allegedly told Mr Cohen he was not comfortable with the position.
All these vague memories – what a shame. Maybe these people should take up computer chess, or Sudoku, or Latin lessons, something to keep the mind sharp.
Then again, maybe it's just the subject matter. When the New York Times ran an article about Cohen's troubles yesterday, it described the manager of the $14 billion hedge fund as follows:
Mr. Cohen, who now lives in a 14,000-square foot mansion in Greenwich, Conn., emerged this year as a financial supporter of Mitt Romney — and a vocal opponent of President Obama — during the presidential race.
It seems, however, that someone was paying pretty close attention to the Times article, because they goofed in that paragraph. Today, the paper ran a correction:
An article on Thursday about efforts by the hedge fund manager Steven A. Cohen to defend his firm, SAC Capital Advisors, against a government inquiry into insider trading misstated the size of Mr. Cohen's house in Greenwich, Conn. It is 35,000 square feet, not 14,000.
Well, glad we cleared that up! One doubts that Stevie Cohen personally called the Times to correct the error, but somehow I feel sure that Cohen has a little more than a vague memory of how many thousands of square footage you can find in his awesome-ific, Versailles-ian mansion. How and why he decided to sell off $700 million of biomed stocks, well, that's a different story.
I think I'm going to cue up this Peter Gabriel tune every time we get one of these stories:
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