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Former hedge fund portfolio manager Mathew Martoma exits a New York federal court after being charged in one of the biggest insider trading cases in history. He worked for CR Intrinsic Investors LLC, a firm that was associated with Steven Cohen's SAC Capital Advisors.
Speculation about the size of a potential deal for AEG — estimates range from $8-$10 billion — has quickly made Angelenos forget about the $2-billion-plus price that Guggenheim Baseball Management and Magic Johnson paid for the L.A. Dodgers earlier this year. Angelenos may have forgotten something else: Until Guggenheim Partners swept in from Chicago to add another half billion to the deal, the price for team was hovering around $1.6 billion and the leading bidder was Steven Cohen.
As I explained at the time, Cohen — one of Forbes' wealthiest Americans, with a net worth north of $8 billion — was one of the few bidders for the Dodgers who could basically write a check for the team. In fact, that seemed the likely outcome, until Mark Walter and Guggenheim emerged from the background. Cohen had even paired up with local L.A. billionaire Patrick Soon-Shiong, the richest guy in town. It wasn't enough in the end to trump Guggenheim's bid.
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One of the potential bidders for the Dodgers, due to be sold out of bankruptcy by April 30, is Steven Cohen, a secretive and monumentally successfully hedge fund billionaire. I've already written about how he made his money. I've also speculated on why he might want the Dodgers. What I haven't dealt with is that possibility that he could wind up in jail.
That's probably overstating the case. However, Cohen's firm, SAC Capital Advisors, has seen a number of former employees get in hot water with the Securities and Exchange Commission over insider trading. And the heat just got turned up a few notches. As part of an ongoing investigation into insider trading at hedge funds, the FBI has arrested three SAC Capital alumni (and they aren't the first to face prosecution). This is from CBNC's John Carney:
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Clayton Kershaw and teammates of the Dodgers celebrate a two run homerun of Matt Kemp for a 2-1 win over the St Louis Cardinals at Dodger Stadium on April 17, 2011.
As KPCC's Corey Moore reported yesterday, billionaire hedge fund king Steven Cohen wants to buy the Los Angeles Dodgers. You'll recall that owner Frank McCourt, mired in an acrimonious divorce proceeding and dueling with Major League Baseball Commissioner Bud Selig, put the team into bankruptcy in June. That desperate gambit failed and McCourt has given up the fight. The team now has to find a new owner by April 2012.
Enter Cohen, with an estimated net worth of $8 billion, but more importantly, a reputation as Wall Street's most successful — and controversial — trader. In fact, few men more perfectly represent the ascent of the swashbuckling trader on the Street than Cohen, who started his hedge fund, SAC Capital Advisors, in 1992. It's now worth $12-$14 billion.
With coin like that, Cohen could easily afford to bid for the Dodgers, whose value has been pegged at around $1 billion.