(Reuters) - Lawyers for SAC Capital Advisors founder Steven A. Cohen expressed support for a government motion to delay insider trading civil proceedings against Cohen, pending related criminal charges against his hedge fund, according to a court filing on Friday.
Cohen’s defense lawyers said that they supported the Justice Department’s motion, with the caveat that the Securities and Exchange Commission promptly provide documents relating to the case, which consists of “at least 375 million pages”.
Cohen’s lawyers from law firms Willkie Farr & Gallagher and Paul, Weiss, Rifkind, Wharton & Garrison said that they would not have enough time to prepare for the case once the delay is lifted if the documents aren’t produced quickly.
“Denying document discovery pending resolution of the related criminal proceedings would greatly prejudice (Cohen),” said SAC’s lawyers in the court filing.
The SEC filed charges against Cohen on July 19, claiming that the 57-year-old billionaire owner of SAC Capital failed to supervise former SAC portfolio manager Mathew Martoma and SAC executive Michael Steinberg, both of whom face criminal and civil insider trading charges.
The SEC sought to bar Cohen from the financial industry and from managing other people’s money.
Less than a week later, Cohen’s firm SAC Capital, among a handful of other executives, were indicted by the Justice Department on criminal insider trading charges. Cohen was not named in the indictment. The hedge fund has since pleaded not guilty, although at least two SAC portfolio managers have pleaded guilty individually.
In all, 10 ontime SAC employees have been charged or implicated in insider trading.
If the Justice Department’s motion to stay the SEC case against Cohen is eventually granted by a U.S. administrative law judge, then the civil charges against Cohen could get delayed until after the conclusion of the criminal case.
Often when the SEC and DOJ bring related charges against defendants, the SEC delays its proceedings to make way for criminal charges to move forward.
Such was the case in the prosecution of former Goldman Sachs Group Inc. board member Rajat Gupta in 2011 when federal prosecutors intervened with an insider trading case brought against Gupta by U.S. securities regulators.
In that case, the SEC later agreed to drop charges against Gupta entirely. However, the criminal case against Gupta continued and he was sentenced to two years in prison for insider trading in October 2012. Gupta has appealed the sentencing.
An SAC spokesman did not immediately respond to a request for comment. Neither did SAC lawyers. Government lawyers could not be reached for comment.
Reporting By Casey Sullivan and Emily Flitter; Editing by Jeremy Laurence