I believe this was part of the downdraft and erratic market behavior in May. Combined with the cram down offering of AIG, let to a rough patch. Oil rising predictably shook some consumer confidence and crimped discretionary spending. But all of this was known. The unknown was the larger seller sitting on the market at the close of the day each week. SAC investors begin to eye the door.
An article by Katie Benner from Fortune is the first thing I have seen written about what I have talked privately about.
By Katie Benner May 31, 2011: 7:37 AM ET
The government investigation of Steve Cohen’s firm has reportedly prompted a well-known investor to put in a redemption request. Will more follow?
FORTUNE — Last week I wrote that investors were standing by their man Steve Cohen, despite the fact that government investigators and a prominent Congressman were probing his hedge fund firm, SAC Capital.
While there’s still no wave of redemptions, Institutional Investor broke the news that an investor wants out of SAC because,”the government seems so intent now in getting [SAC] and there are additional SAC-related characters tainted,” the anonymous investor told the magazine.
The investor, whom the publication called “well known,” added that SAC has the best compliance in the industry. But that was not not enough to assuage his fears.
It’s important to remember that neither Steve Cohen nor SAC have been charged with any wrongdoing. Even so, politicians and regulators are turning up the heat under Cohen, the man that Reuters called the government’s Moby Dick, and who Senator Charles Grassley worries may foster a culture that encourages insider trading. The Financial Industry Regulatory Authority (FINRA) provided Senator Grassley’s office and the Securities and Exchange Commission with 20 instances when employees at SAC may have traded on inside information; and representatives from SAC met with Congressional representatives this month to discuss the investigation.
via SAC investors begin to eye the door – The Term Sheet: Fortune’s deals blog Term Sheet.