SAC Capital Advisors, the hedge-fund firm facing federal insider-trading charges, has shut down its trading unit as the US$14 billion firm’s capital base begins to shrink in the wake of a criminal indictment filed against it.
The New York based unit, Parameter Capital, which had managed money for SAC was started in 2010 with 12 employees and was led by Glenn Shapiro and Anil Stevens.
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Stevens and his team have left to start a new hedge fund and take as many as nine people with him.
The decision to close Parameter was planned before federal prosecutors last month charged Cohen’s firm in a five-count indictment with fostering a culture in which employees flouted the law and were encouraged to tap their personal networks for inside information about publicly traded companies.
SAC was granted court approval last week to continue operating until the cases are resolved.
The firm will have as much capital to invest at year’s end as it had in 2009, according to an email sent by Tom Conheeney, SAC Capital’s president.
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By GlobalDataIn recent months, investors have asked to withdraw about US$5 billion from the US$14 billion fund, leaving only about US$1 billion of outside capital.
Parameter’s demise also offers the first sign that SAC, which has some 1,000 employees, is looking to shrink in the wake of the indictment.
Investors in Cohen’s fund, who have already pulled several billion dollars this year, have until the end of this week to submit requests to redeem capital by the end of the year.
