Judge nixes ex-wife's civil racketeering claim against billionaire Steven Cohen, but OKs fraud case
Posted Jan 27, 2014 06:30 pm CST
A federal judge in New York on Monday dismissed a civil racketeering count in a fraud case filed against billionaire Steven Cohen by his ex-wife, Patricia Cohen.
However, U.S. District Judge William Pauley gave a green light to her fraud case against the hedge fund manager even though Pauley nixed the count brought under the Racketeer Influenced and Corrupt Organization Act, writing “Civil RICO and marriage do not go together like a horse and carriage,” USA Today reports.
After the couple married in 1979, Patricia Cohen says, her then-husband put all of their assets, except for their home, into a hedge fund, SAC Trading Corp. Her suit contended that Cohen, who founded SAC Capital Advisors LP, ran the hedge fund as a RICO enterprise, committing acts of bank fraud, insider trading and money laundering, Bloomberg reports.
Underlying the case is an $8.7 million real estate investment made in New York more than 20 years ago. The lawsuit says Steven Cohen told his wife, prior to their divorce, that the money was gone. But after their 1990 divorce, she found out he had received a $5.5 million settlement.
The judge noted that a separation agreement “specifically disclaimed” any representation by Steven Cohen concerning the value of this investment. However, because Patricia Cohen may have reasonably relied on her then-husband’s statement about losing the money, Pauley denied the motion to dismiss her fraud claim.
Cohen has been under fire on multiple fronts in recent decades, and his ex has said she got the idea of filing the suit against him, seeking $100 million in damages, after a 60 Minutes broadcast.
ABAJournal.com: “Sanctions Sought, But $100M RICO Claim Survives in Hard-Fought Divorce”
ABAJournal.com: “Hedge fund SAC Capital is indicted for alleged insider trading””
USA Today: “Witness: Investigators pursued SAC Capital boss”