[ by Melanie Gretchen ]

SAC Capital Advisors has generated such enormous returns that it's earned the right to be viewed literally as "the goose that laid the golden egg," and to say that Steven A. Cohen is the stuff legends are made of.  In 2010 and 2011, SAC Capital Advisors attracted over $1.6 billion in new capital and, along the way, its traders surfed the wave of SAC-cess.

But this is 2012, and to date, 12 current and former SAC employees have been pulled into the insider trading investigation.  Pharmaceutical industry analyst Mathew Martoma is the latest one to be arrested and nothing would please government prosecutors more than to sufficiently link Mr. Cohen to Mr. Martoma's supposed insider trading.  That would give prosecutors "a baker's dozen" - that's 13, and includes a bonus of one.  

Writing in NYT Dealbook, Jesse Eisinger said:  "you have to wonder whether his returns have been generated not only through his trading brilliance but also through a culture of cutting corners and pushing employees to the point where they break the law."

Industry trade publication, Absolute Return, said that in this age of the Internet, it's impossible to imagine that any investors who continue to fuel SAC's business wouldn't know that insider trading investigations are in full bloom, and that government prosecutors are going after hedge fund managers like Steven Cohen, "like bees to pollen."  Same can be said about major financial institutions like Citigroup, Blackstone, and Société Générale, whose clients are heavily invested with SAC.  One doesn't hear often, if at all, about their staff members suggesting to clients that they consider pulling out of SAC. 

SAC is not making Mr. Cohen available for comment, and a firm spokesperson emphatically noted that "insider trading isn't acceptable in our culture of compliance, and we don't give a wink or nod to the contrary.  We expect our people to play by the rules and act with integrity."

[C-I Note:  We have no idea whether Mr. Cohen was involved with any trades that the government alleges were based on insider information.  Nor do we know if Mr. Cohen ever suspected or had specific knowledge that any SAC employees traded on insider information.

We hope, for Mr. Cohen's sake, that he can stay above the fray and avoid being associated any illegal trading activities that current or former SAC employees have been charged with.  In a worst case scenario, his golden eggs will turn on him, as well.] 

For further details, go to [Dealbook, 12/12/12].