Two executives of SAC Capital Advisors went to the firm’s London offices across from St. Paul’s Cathedral Tuesday to deliver some unwelcome news.
Bloomberg reports that Tom Conheeney, SAC’s president, and Sol Kumin, the chief operating officer, told their more than 50 employees there they were shutting the U.K. operation by the end of the year.
Steven Cohen’s $14bn hedge-fund firm, which had previously assured staff that it planned to continue business as usual after U.S. prosecutors charged it with insider trading, would have to scale back, they said.
'It has become clear to us that the outcome the government is demanding is likely to have a greater than first anticipated impact on the firm', Conheeney wrote in a memo that was sent to employees. 'We have concluded that we must operate as a simpler firm and reduce our capital allocations'.
Negotiations between the government and SAC have been going on since at least mid-September, according to people familiar with the talks, yet the move to shut its London unit, one of its largest offices outside the U.S., is the first public acknowledgment that SAC expects to manage a lot less money in the coming months. The firm, indicted by a U.S. grand jury in July on allegations that it engaged in unprecedented illegal trading for more than a decade, also cut six investing jobs in the U.S. this week, Conheeney said.
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image: © Steve Snodgrass