The best thing that the Department of Justice (DOJ) could do immediately to restore faith in the criminal justice system is to prosecute Steven Cohen, the head of SAC. The indictment of SAC charges that many SAC officers committed crimes due to: “institutional practices that encouraged the widespread solicitation and use of illegal inside information.” That indictment supports that claim with detailed allegations. For example, paragraph 6 states that “employees were financially incentivized to recommend to [Cohen] ‘high conviction’ trading ideas” that would inherently come from insider information. Providing “high conviction” tips to Cohen was a job requirement and a code phrase that signaled to Cohen that he could invest his funds with confidence due to the insider information. Paragraph 7 observes that “the predictable and foreseeable result … was systematic insider trading.” Paragraph 11 explains that SAC investment managers had a duty to provide Cohen with “high conviction” deals and that Cohen made fulfilling this duty a top priority. Paragraph 13 explains that the managers’ bonuses largely depended on the “high conviction” tips they made to Cohen.
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- Political Theatre and the Government Shutdown October 2, 2013
- Randy Wray: The Taper, the Debt Ceiling and the Prospects for Growth September 23, 2013
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