Friday, December 14, 2012

Former SAC Trader Busted With
Biggest Insider Trading Profit In History

Mathew Martoma exits federal court in New York on Nov. 26, 2012

Former SAC Trader Busted With Biggest Insider Trading Profit In History
Submitted by Tyler Durden on 11/20/2012 12:31 -0500

Cohen ETC Expert Networks FBI Florida Insider Trading Israel Israel Englander New York Stock Exchange SAC Steve Cohen Switzerland


Over two years ago, on November 5, 2010, weeks before news broke out that the SEC had caught hedge funds in a massive insider trading scheme involving expert networks, and before the phrase expert network was even mentioned in places away from hedge funds, we wrote an article, titled "Is The SEC's Insider Trading Case Implicating FrontPoint A Sting Operation Aimed At S.A.C. Capital?" that predicted everything that has transpired with SAC since then: we said expert networks would be exposed as the root of virtually all "information arbitrage" alpha by Steve Cohen, more importantly, we exposed various biotech stock trading patterns, where the informational benefits from easily bribable doctors would result in immediate profits courtesy of advance knowledge of Phase 2, 3 and NDA results. Today, we discover not just how deep the SAC insider trading schemes went, but that the profit from such information abuse amounted to hundreds of millions in standalone cases. Adding these together and one can see why Steve Cohen - whose knowledge of these epic inside trading scheme is of course never implied by us: after all, that's what the DOJ, the SEC and the various DA offices are for - was generating 20% returns year after year and able to pocket 3% and 50%.


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