Tuesday, June 4, 2013


Beginning modestly in 1992, Steven A. Cohen has presided over one of the most successful hedge funds in history.  Returning around 28% a year since then in his SAC Capital Advisors LP and its brethren and enriching not only its managers (Cohen is a billionaire many times over) but public-employee and private retirement funds and individual rich people and families.  THAT IS UNFAIR, and they must be cheating, some government bureaucrats and political appointees figured.  So naturally not understanding or trusting success in the private sector, the United States Federal Bureau of Investigation went after it and its employees with a vengeance.  Nothing has been filed by the Justice Department and a five-year statute of limitations is nearing (July 2013), so the government is pushing intensely to force admissions of guilt and settlements.  While Cohen agreed to one -- $616 million to settle two insider trading cases without admitting any guilt -- it apparently that didn't sit well with Attorney General Eric Holder and perhaps his brother-in-arms and boss President Barack Obama by whom such a settlement likely would be passed.  SAC which has been cooperating recently, made the decision to stop cooperating for some uncertain reason.

It is at a standstill.  EXCEPT outside investors might withdraw as they have the right, $3 to $4 BILLION, leaving about $2 BILLION in outside capital of SAC's approximate $14 BILLION, of which most belongs to Mr. Cohen.

Apparently Obama's think is either 1) if you are way more successful than your peers, you must be cheating.  Achievement isn't in his vocabulary or 2) he just wants to go after Cohen.

Please read yesterday's post of an increasing risk-adverse culture infecting entrepreneurs and workers in the United States.  The U. S. government trying to kill companies because they are successful as with SAC must only greatly contribute to this dangerous trend.

I am sure it is a coincidence that May 2013 was the worst month for factory output and employment since the recession end four years ago.  The fragile "recovery" is one of the worst ever.

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