Senator Elizabeth Warren is pissed and she is letting the Securities and Exchange Commission (S.E.C.) know it in no uncertain terms.
Her anger stems from S.E.C. regulators’ (I use that term loosely) decision to allow billionaire Steve Cohen to form a new hedge-fund firm even though he is not supposed to have anything to do with the industry for two years. The Wall Street mogul was punished after he failed to properly supervise one of his employees who is now in federal prison for insider-trading. Cohen’s firm pleaded guilty to securities fraud and paid a $1.8 billion fine.
Cohen managed to escape criminal charges (SHOCKING!) by agreeing to return all of the firm’s outside money, renaming it Point72 Capital and signing an agreement vowing not to manage anyone’s money or employees who are managing other people’s money until 2018.
Unfortunately, the agreement did not prevent him from owning a firm that profits off of other people. So, he waited a mere months before forming a new firm, Stamford Harbor Capital, to do just that. This enraged Senator Warren and she sent a letter to the S.E.C. on Thursday morning ripping them apart for allowing Cohen’s new firm to register with them. The Senator said that in doing so they are allowing the firm to make “a mockery of the S.E.C.’s core mission to ‘protect investors’”:
“The Commission has permitted a recidivist hedge fund manager, well-known for his former company’s willingness to evade and ignore federal law, to once again profit from—and potentially exploit—investors. This is an unacceptable outcome from the nation’s primary enforcer of securities laws the latest example of an S.E.C. action that fails to appropriately punish guilty parties, deter future wrongdoing, and protect investors.”
It is absolutely infuriating that the S.E.C., who is supposed to be protecting us from predators on Wall Street, has allowed this criminal to open another firm. Make no mistake, just because he wasn’t charged doesn’t make him any less of a criminal. For far too long hedge-fund managers have been allowed to get away with robbing the rest of us blind. Cohen just spit on the S.E.C. and they are standing by and taking it.
So, in other words, it is business as usual on Wall Street.