HSBC’s private bank advised clients to not add money to Steven A. Cohen’s SAC Capital Advisors LP amid a U.S. government insider-trading investigation into the hedge fund, according to a person with knowledge of the matter.
Bloomberg reports that the bank made the recommendation to some clients last month after SAC disclosed that regulators may file civil fraud claims against it, said the person, who asked not to be named because the information is private. SAC, based in Stamford, Connecticut, has told some employees it expects investors to withdraw at least $1 billion, or 17% of the money it manages for outside clients, the Wall Street Journal reported Friday.
Citigroup’s private bank last month suggested clients not add to their SAC investments after the November arrest of a former portfolio manager and disclosure that the U.S. Securities and Exchange Commission is considering suing the $14bn hedge fund. The investigation marks the first time government officials have linked Cohen to trades at the center of an insider-trading case.
Medard Schoenmaeckers, a Zurich-based spokesman for HSBC’s private bank, declined to comment on investments in SAC. It’s 'far too early to speculate about redemptions and we do not expect redemptions to have a significant impact on our funds', said Jonathan Gasthalter, a spokesman for SAC.
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