Senator Warren Calls Stamford Harbor Decision a "Mockery" of SEC's Mission to Protect Investors

Senator Elizabeth Warren wrote a letter to SEC Chair Mary Jo White in which she raised concerns over what she called "the latest example" of the SEC's failure to "punish guilty parties, deter future wrongdoing, and protect investors." Senator Warren's letter is a response to the SEC's decision to approve the application submitted by Stamford Harbor Capital, L.P. – an investment management vehicle co-owned by Steven A. Cohen – to register as a money manager for outside clients.

In the letter, she notes that in January 2016, the SEC barred Mr. Cohen from "supervising funds that manage outside money" until 2018 as a result of his role in the SAC Capital insider trading case.

Steven Cohen is associated with Stamford Harbor through indirect ownership not prohibited by the terms of the SEC January settlement. Senator Warren asserted that the decision to approve Stamford Harbor, in addition to the original settlement permitting Mr. Cohen's involvement in an owner's capacity, makes a "mockery" of the SEC's mission to protect investors. Senator Warren stated:

[The SEC] has permitted a recidivist hedge fund manager, well-known for his former company's willingness to evade and ignore federal law, to once again profit from – and potentially exploit – investors.

Senator Warren called on SEC Chair White to provide (i) a briefing on the Stamford Harbor decision and (ii) a "complete list" of all other individuals and firms who were barred by the SEC from managing funds (or barred from other activities) but remain indirectly involved in those activities, together with explanations of why their continued involvement was permitted.