The SEC is not done with Steve Cohen nor Raj Rajaratnam reports BusinessInsider. It has launched a probe into the activities of several hedge funds regarding the takeover of Cougar Biotechnology, including Rajaratnam’s Galleon Group and Steve Cohen’s SAC Capital. Cougar is a biopharmaceutical company that focuses primarily on oncology. Specifically, in 2009, Cougar was developing various compounds to aid in the treatment of different cancers, including prostate cancer, breast cancer and myeloma. Johnson & Johnson (JNJ) bought the company on May 21, 2009 for $1 billion – the deal sent shares in Cougar soaring 16%.
SEC Cougar Takeover Investigation, Starring Steve Cohen, Raj Rajaratnam and Stanley Druckenmiller, Amongst Others
Now here is where it gets interesting. The SEC is raising questions about Steve Cohen’s SAC Capital Management‘s ownership of Cougar shares before the deal and its relationship with MedaCorp, the investment bank that advised Cougar through the buyout process. According to the Wall Street Journal, “Regulators also have examined trading around the Cougar takeover by other hedge funds, including Stanley Druckenmiller‘s Duquesne Capital Management and [Raj Rajaratnam’s] Galleon Group. It is unclear whether the examinations are continuing.” The Wall Street Journal also clarifies, “The SEC hasn’t accused SAC or the other entities involved in the Cougar probe of wrongdoing. It is unclear whether the inquiries, which have been ongoing for more than a year, will result in any charges.”