(Recasts lead, adds details about settlement, history of move
to family office)
June 27 Steven A. Cohen's SAC Capital reached an
agreement with U.S. securities regulators on Friday for the
once-powerful hedge fund to no longer be an investment adviser,
following the firm's guilty plea to insider trading charges last
The Securities and Exchange Commission's order, stipulating
that SAC will stop being an investment adviser on June 30, was
widely expected after the government prohibited the firm from
managing money for outside clients.
Cohen, who has not been charged with any criminal
wrongdoing, had already restructured SAC Capital and renamed it
Point72 Asset Management to signal the change from being a hedge
fund to a family office before the June 30 deadline.
Family offices, unlike hedge funds, are not required to
register with the SEC and they generally do not manage
outsiders' money, preventing them from earning the lucrative
performance and management fees charged by hedge funds.
The firm will now manage only Cohen's personal fortune,
estimated to be between $9 billion and $10 billion. The hedge
fund, which Cohen started with $25 million in 1992, managed $12
billion in assets in February, the SEC said.
At age 58, Cohen joins industry elder statesmen George Soros
and Carl Icahn in the transformation of hedge funds into family
offices; Soros and Icahn both took that step several years ago.
Separately, Cohen still faces civil charges after the SEC
last year accused him of failing to supervise SAC employees who
where later found guilty of insider trading.
The case has been postponed until later this year. Cohen has
denied the charges.
(Reporting by Svea Herbst-Bayliss in Boston and Sarah N. Lynch
in Washington; Editing by Susan Heavey and Leslie Adler)