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Ian Roffman, chair of the Litigation Department and a partner in the firm’s Securities Enforcement and Litigation practice group, was quoted by the Bloomberg News and the Chicago Tribune in “Will shift in insider trading spell a comeback for Steve Cohen?” on October 29. The article discusses the civil case brought by the United States Securities and Exchange Commission (SEC) against SAC Capital Advisors Founder Steve Cohen, in which he was accused of failing to supervise Matthew Martoma and Michael Steinberg, two former SAC money managers. The SEC recently exonerated Steinberg of insider training and Martoma’s attorneys have asked a federal appeals court to throw out his conviction. A successful appeal for Martoma could force the SEC to revisit its case against Cohen. After SAC Advisors was shut down in a plea deal, Cohen refrained from managing outside money; however, many speculate he may be readying himself for a comeback. If the conviction is affirmed, a severe penalty such as a lifetime ban seems less likely than when the original case was filed against Cohen two years ago−since then a dozen insider convictions were tossed and the SEC’s in-house judicial process came under fire as unconstitutional.

Ian, a former Senior Trial Counsel in the SEC’s Boston office, notes that the case against Cohen is unusual and aggressive. “Just because there is a fraud in a firm, it doesn’t mean there was a failure to supervise,” he said. “It’s very unusual to bring a failure-to-supervise case built on insider trading by somebody else.”

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