SAC Probe Said to Be Hampered by Auto-Deleted E-Mails

Email Simon Stratford

The federal investigation of insider trading by SAC Capital Advisors LP and its founder, Steven A. Cohen, has been hampered by a lack of extensive e-mail evidence. One reason: During the period of time at the heart of the probe, July 2008, SAC automatically deleted its e-mails.

Bloomberg News reports that unluckily for the U.S. government, SAC changed its policy just months later, requiring preservation of electronic communications. By then, most messages relevant to the $700m in alleged illegal trades had been erased, according to a person familiar with the matter.

Until the fall of 2008, SAC e-mails were deleted from employee electronic mailboxes every 30 or 60 days, according to SAC General Counsel Peter Nussbaum. He was questioned in a deposition two years ago by lawyers for Fairfax Financial Holdings Ltd., which had sued SAC and other hedge funds over damage caused by short sales. SAC, a $14bn fund, was ultimately dismissed from that case. Bloomberg News reviewed a transcript of the deposition.

Hit the link below to access the complete Bloomberg News article:

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