I was wondering if anyone wanted to comment on the recent inquiry into the recommendations of a Holly Becker of Lehman Brothers on Amzn back in 2000. According to the Times, she's married to a SAC retail trader who might have had prior access to her downgrades. Apparently the SEC is looking into SAC's trading on Amzn back then too... Cohen is supposed to be the best out there, posting 100% + returns, but what to make of this revelation? Maverick
I happened to come across it yesterday in the New York Times...WHat really caught my attention was the fact that Holly Becker had a computer networked to all of the pending Lehman Brothers research in her house, where her husband, the fund manager easily could have found it...That will probably be the most damaging evidence cause it will definitely prove that he had access to the information even if Holly Becker was not complicit in sharing her research with him... It would be really unfortunate if she had no knowledge of the events, but no one really knows either way...It sounded to me more like the plot line of some financial fiction novel...Perfect scenario, an analyst and portfolio manager living together and one has access to the others research...
If it's true that SAC benefited from the their retail trader's insider knowledge, then I hope that he was the proverbial one bad apple and that Cohen's returns are relatively 'pure'... after all, it's nice to have a high standard set in place for other traders who want to reach new heights in their performance. But if those 100%+ a year are largely the product of big bets based on inside knowledge, and Cohen readily acknowledges that he makes his big money on 5% of his trades, then that would be something of a disappointment... At any rate, I guess it's hard to say what really goes on out there.