Ex-Wife Strikes Back - Another Blow For SAC's Steven Cohen

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The ex-wife of SAC Capital Advisors founder Steven A. Cohen won reinstatement of most of a lawsuit in which she seeks $8.25m in damages based on claims the hedge fund is 'the product of an ongoing racketeering scheme' that engaged in insider trading.

Bloomberg reports that Patricia Cohen’s July 2010 amended complaint was dismissed in 2011 for being filed after legal deadlines. A federal appeals court in Manhattan Wedneday ruled her lawsuit was filed in a timely manner, and that she validly stated claims her husband violated the Racketeer Influenced and Corrupt Organizations Act, as well as common law fraud and breach of fiduciary duty. A fourth claim was found to have been properly dismissed.

Her case was returned to the lower court to determine whether other legal grounds might warrant dismissal or whether evidence gathering can begin in preparation for a trial. The court didn’t rule on the merits of her claims.

'The question before us is limited to whether the allegations of the complaint are sufficient to go forward to be tested at trial', the court said in its ruling.

Cohen, whose $15bn hedge fund is at the center of a multiyear federal insider trading investigation, allegedly hid $5.5m from his ex-wife during their 1990 divorce, her lawyer argued at an appeals court hearing in February 2012. Cohen’s wife seeks half that amount as part of her divorce settlement and asks that the sum be tripled as the RICO statute permits.

Hit the link below to access the complete Bloomberg article:

Steven Cohen’s Ex-Wife Has Her Suit Against Him Reinstated

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