Steven Cohen blocked by UK regulator from reopening fund

US hedge fund manager Steven Cohen has been blocked by the UK regulator from reopening his multibillion-dollar fund to investors in Britain, after a two-year ban over insider trading at his previous firm expired at the start of this year.

Mr Cohen recently returned to the US hedge fund business and had hoped to move back into Europe by managing outside money again in the UK.

But the UK Financial Conduct Authority has refused to allow him to reopen his fund to clients in Britain, according to two people familiar with the application. The FCA ruled that Mr Cohen was not “fit and proper” to do so, one person said.

It is the second time in 12 months that the 62-year-old’s new fund, Point72, has hit a British roadblock in his attempt to rebuild his business after the misconduct that sank SAC Capital, his previous outfit.

Last year, the FCA was wary of giving its approval before the end of the term on the US Securities and Exchange Commission ban. While Point72 was not formally denied permission, it was given an indication from the regulator that it would not be approved, so the application was withdrawn and resubmitted this year only for it to be rebuffed again. Point72 and the FCA declined to comment. 

Mr Cohen has been focused on managing much of his personal fortune via Point72 since SAC Capital was banned by the SEC from managing clients’ money after admitting to trading on inside information.

Since the SEC lifted its ban on Mr Cohen in January, Point72 has raised $3bn from outside investors, giving it $12bn of assets including his personal funds. But it still had to seek authorisation from the FCA to make a full return to the UK.

Family offices do not need the FCA’s approval to operate in the UK. But they do need it if they want to manage anyone else’s money or to make certain changes to the way a fund is structured.

Point72 opened the London office for its family business in 2016 and hired Will Tovey, former head of Barclays’ equities distribution business in Europe, to run the British operation.

The fund recently hired senior UK executives from Credit Suisse and Och-Ziff after moving into a new London office in St James’s Square and had planned to grow from 50 employees in London to as many as 100.

SAC Capital pleaded guilty to insider trading in 2013 and paid a record $1.8bn in fines. Mr Cohen was never personally charged with insider trading but was barred from supervising funds that managed outside money as part of the settlement, and several of his portfolio managers were convicted and sentenced to prison terms.

Point72 is also battling a lawsuit filed by its head of talent analytics, who has accused it of rampant sexism and underpaying female workers. Its president, Douglas Haynes, who was one of the named defendants in the case, stepped down in the wake of the lawsuit.

The fund has said it “emphatically denies” the allegations and stands by its record of hiring and developing women. The claimant in the lawsuit, Lauren Bonner, asked for $13m to settle the lawsuit, according to a person familiar with the case. The fund is seeking to compel arbitration in the case.