June 5, 2014 / 6:41 PM / 5 years ago

Hedge fund mogul Cohen hired legal titan Boies: source

(Reuters) - Hedge fund mogul Steven A. Cohen hired high-profile lawyer David Boies last year to defend him in a U.S. Securities and Exchange Commission proceeding that arose from a long-running insider trading probe, a person familiar with the matter said on Thursday.

Boies was retained by Cohen in 2013 to help handle matters with the regulator, which last year initiated an administrative proceeding against the SAC Capital Advisors founder for failing to supervise two employees and prevent insider trading, the person said.

In the proceeding, the SEC seeks to bar Cohen from overseeing investor funds.

The hiring of Boies, who chairs the law firm Boies, Schiller & Flexner, added to Cohen’s defense team a lawyer well-known for his trial exploits.

A Boies Schiller spokeswoman declined to comment.

Eight SAC employees have been convicted of or pleaded guilty to insider trading. SAC pleaded guilty last year to fraud and agreed to pay $1.8 billion in criminal and civil settlements.

Under its plea deal, SAC Capital, which employed roughly 1,000 people at its heyday, agreed to stop managing money for outside investors.

The firm, which managed $12 billion, has changed its name to Point72 Asset Management and invests Cohen’s personal fortune as a so-called family office. A spokesman for Point72 declined to comment.

Cohen has not been criminally charged, but he continues to face the SEC’s civil administrative case. Cohen has been in contact with the SEC regarding a settlement, a person familiar with the matter previously told Reuters.

Last week, an SEC administrative judge agreed to stay the proceedings against Cohen at the request of prosecutors, who said a delay was needed until a U.S. appeals court ruled in a closely watched case that could affect the conviction of SAC portfolio manager Michael Steinberg.

The 2nd U.S. Circuit Court of Appeals in New York is weighing whether prosecutors, to secure insider trading convictions, must establish that the recipient of non-public information knew that the source of the tip benefited from the disclosure.

Steinberg, who was one of Cohen’s top lieutenants, was sentenced to 3-1/2 years in prison May 16.

Mathew Martoma, another former SAC portfolio manager, was found guilty of insider trading and is scheduled to be sentenced Tuesday, though the parties have requested a delay.

Fox Business first reported Cohen’s hiring of Boies.

Boies represented the U.S. Justice Department in its antitrust lawsuit against Microsoft Corp from 1998 to 2000. He also represented former Vice President Al Gore at the U.S. Supreme Court over the disputed 2000 presidential election

More recently, he worked alongside Theodore Olson, who represented President George W. Bush in the 2000 case, in a successful challenge to California’s ban on same-sex marriage, which the U.S. Supreme Court in 2013 declined to decide.

Reporting by Svea Herbst-Bayliss and Nate Raymond; Editing by Steve Orlofsky

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