Hedge funds JANA Partners and S.A.C. Capital Advisors, which control about 8.4 percent of TD Ameritrade, have told the company it should merge with either of its rivals, E*Trade Financial or Charles Schwab Corp. to boost shareholder value.
lil about...SAC Capital / Steven A. Cohen
SAC Capital Advisors in a harsh spotlight
March 27, 2006
The secretive hedge fund SAC Capital Advisors, run by Stephen Cohen, is taking some big media hits. 60 Minutes ran a lengthy piece on its battle with Biovail, which has sued the hedge fund and is more than willing to discuss the issues publicly. Its take is that SAC conspired with a so-called independent research outfit to produce damaging reports and then pushed the firm to delay release of the report so it could build a short position.
How Does Steve Cohen Do It?
Your article about "Stevie" Cohen was infuriating ("The most powerful trader on Wall Street," Cover Story, July 21). Clearly, the markets are stacked in favor of people like SAC Capital Advisors founder Steven A. Cohen, who (according to your writers) trades on special, nonpublic, material information that is unavailable to the public.
Geoffrey Batrouney
New Rochelle, N.Y.
You note that SAC Capital Advisors pays full commissions and thereby receives analysts' recommendations ahead of the general public. How is this different from one of his traders acting on information from his analyst wife before it is made public?
Ted Levin
Grant, Koehler & Levin Ltd.
Seattle
Editor's note: The writer is a partner in an investment advisory firm.
"The most powerful trader on Wall Street" did not make it clear just how effective the alleged "three aggressive tactics" have been for SAC Capital Advisors, and you neglected to mention the extent to which SAC uses the legal practice of "front-calling" (not to be confused with the illegal practice of "front-running"). I suspect that such tactics would not add more than a few basis or percentage points to long-term returns, and that most of SAC's returns have been caused by other factors.
Charlie Stromeyer Jr.
Concord, Mass.
AUGUST 11, 2003
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