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SEC case against SAC's Cohen stayed by judge

Reuters with CNBC.com
Thursday, 8 Aug 2013 | 4:02 PM ET
Scott Eells | Bloomberg | Getty Images

Steven A. Cohen got a reprieve on Thursday, albeit a small and temporary one, when an administrative law judge approved a request to stay a case brought by securities regulators, who have accused the billionaire hedge fund manager of failing to supervise two of his employees.

Chief Administrative Law Judge Brenda P. Murray granted a stay of the U.S. Securities and Exchange Commission's administrative proceeding against the SAC Capital Advisors founder in an order filed on Thursday.

Federal prosecutors in New York had requested the stay until after criminal cases against the two one-time employees and the $14 billion hedge fund were resolved.

Murray simultaneously denied a request filed by Cohen's lawyers asking that the SEC turn over to Cohen's team the documents related to the case even if it were put on hold in favor of the criminal proceedings.

A spokeswoman for the SEC declined to comment. A spokesman for SAC capital declined to comment. A spokeswoman for Manhattan U.S. Attorney Preet Bharara also declined to comment.

SEC vs. SAC's Cohen latest
CNBC's Kate Kelly reports a judge has approved motion to stay civil proceedings against Steven Cohen. SAC's Cohen was charged with failure to supervise his employees as they engaged in what was described as securities fraud.

The SEC filed charges against Cohen, 57, on July 19, claiming he 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 is seeking to bar Cohen from the financial industry and from managing other people's money.

Less than a week later, Cohen's firm SAC Capital was 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 one-time SAC employees have been charged or implicated in insider trading.

Often when the SEC and federal prosecutors bring related charges against defendants, the SEC delays its proceedings to make way for criminal charges to move forward.

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