Cohen deposed by SEC earlier this year

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The Financial Times notes that Steven Cohen was deposed by the Securities and Exchange Commission earlier this year, where he delivered his first (and only) explanation for SAC's controversial trading in shares of Elan and Wyeth before the companies announced negative clinical drug trial results.

Cohen told investigators that he made the trades because he was simply no longer comfortable with the positions.

"Cohen's memory was otherwise vague and that he could recall few details of the content of a 20-minute phone conversation, held in 2008, with Mathew Martoma, the portfolio manager who allegedly told Mr Cohen he was not comfortable with the position," FT reported.

Martoma of course was recently arrested and charged with criminal insider trading. He was highly sought after as a witness against Cohen, but so far, he has refused. The FT notes that at least two other SAC employees were interviewed by the SEC. One was Phillipp Villhauer, Cohen's "head trader."

The next milestone in this saga will likely involve the SEC filing civil charges against the hedge fund firm and possible Cohen himself. Jail time will not be an issue, but it's quite possible that investors will start to trickle away. As for criminal charges, as of now, Martoma seems to be standing firm, though the chances of a long prison term may change his mind. He is free after posting a $5 million bond.

Cohen remains the Teflon Trader as of now. It's going to be hard to make criminal charges stick without Martoma or someone else.

For more:
- here's the article

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