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Defense says Cohen not aware of employees' actions in SEC civil case

July 27
12:10 PM 2013

The defense lawyers for Steven A. Cohen, CEO of SAC Capital Advisors, will argue that he has no time to look into the activities of each of his employees as alluded to in the case filed by Securities and Exchange Commission.

Cohen is facing a civil complaint filed by the US SEC which claimed that he knowingly ignored the "red flags of potentially unlawful conduct" when two of his employees used inside information  for their own benefit in the Dell transaction on Aug. 26, 2008.

Although Cohen sold his own shares from Dell, his lawyers claimed that the move was more a reflection of his confidence about the assessment of his consumer portfolio manager, who was already unloading his own shares at that time. With such trust for the portfolio manager's ability, he followed suit "even if technical analyses counseled against selling."

Cohen's lawyers prepared a white paper, all 46 pages of it, and distributed to all his employees. Reuters in a report said some of the contentions in the paper will be used by his lawyers to clear his name.

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