Deposed Hedge Fund Kingpin Steven Cohen Loses His Top Trader

Steven A. Cohen
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Steven A. Cohen

The longtime top trader for Steven A. Cohen, the deposed hedge fund kingpin, is leaving — just months before Mr. Cohen is expected to re-enter the hedge fund game.

Phil Villhauer, 52, started working for Mr. Cohen's SAC Capital Advisors hedge fund in 2002. When Mr. Cohen was forced to stop accepting outside investors' money as part of a settlement with federal authorities, Mr. Villhauer became the global head of trading at Mr. Cohen's family office, Point72 Asset Management, helping invest $11 billion of Mr. Cohen's personal money.

"For 15 years, Phil Villhauer has been an integral member of the firm's family," Mr. Cohen and Point72's president wrote Tuesday in an internal email that was reviewed by The New York Times. "We are sad to let you know that he is retiring from Point72."

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Mr. Villhauer did not respond to a request for comment.

SAC was one of Wall Street's most successful hedge funds — charging some of the industry's highest fees and managing more than $14 billion in assets — before it pleaded guilty to insider trading charges in 2013. The guilty plea required the firm to stop managing money for outside investors, and Mr. Cohen converted it into a family office to trade his personal fortune.

Mr. Cohen himself has been barred from managing money for outside investors as part of a regulatory settlement with the Securities and Exchange Commission over a claim he failed to properly supervise employees.

But that restriction ends at year's end, and Mr. Cohen is moving toward reopening a hedge fund, appearing at a recent industry conference and having his representatives reach out to potential outside investors.

Despite his crucial role at SAC, Mr. Villhauer was little known on Wall Street until he appeared as a witness in the insider trading trial of Mathew Martoma, a former portfolio manager at SAC who was convicted in 2014. Prosecutors said Mr. Martoma's illegal trades helped SAC avoid losses and generate profits totaling $275 million.

In the trial, prosecutors introduced into evidence several emails from Mr. Villhauer, including one in which he referred to Mr. Cohen as "the big guy."

Mr. Villhauer testified that Mr. Cohen told him in July 2008 to quickly sell millions of shares that Mr. Martoma had amassed in a drug company and to do it with "limited visibility." Prosecutors said those trades began after Mr. Martoma and Mr. Cohen had a 20-minute Sunday phone call. The call took place just days after prosecutors said an inside source told Mr. Martoma about problems with a major clinical trial the drug company was involved in.

The Point72 email from Mr. Cohen and Doug Haynes, the firm's president, gave no reason for Mr. Villhauer's retirement from the firm with more than 1,000 employees.