Don’t trust the iconic hedge fund manager Steven A. Cohen when he seems “distraught,” his ex-wife Patricia advises in her latest lawsuit against no. 113 on this year’s Forbes billionaires list.
The suit, made public yesterday, is Ms. Cohen’s third attempt in the last year to sue Mr. Cohen — from whom she separated in 1988. With a new lawyer, who replaced Gaytri Kachroo, who followed Paul Batista, she wants $2.75 million, down from her $300 million number last December. And she’s no longer demanding, as she was in April, a “substantial, if not controlling” stake in Mr. Cohen’s hedge fund SAC Capital. Plus, the list of enemies has been pared down, to three: Mr. Cohen, his brother Donald, and his former lawyer Brett Lurie, who’s apparently done jail time for fraud.
Luckily, the streamlined suit still comes with pointed fingers and name-calling. Ms. Cohen expands allegations about insider trading: Her ex-husband, the new suit says, learned from trader Bruce Newberg, a pal from Wharton business school, that General Electric would buy RCA. It was information that led Mr. Cohen to buy RCA stock and, she says, make an easy $10 million. Dennis Levine, Mr. Newberg’s “superior” at Drexel Burnham Lambert, was allegedly in on the scheme.
According to Ms. Cohen, Mr. Newberg and Mr. Cohen called themselves “the Wharton mafia,” and just wanted to “take care of one another.”
The $2.75 million in damages is half of the $5.5 million that Ms. Cohen says her ex-husband earned in 1987 — without telling her — while “anticipating he and Patricia would soon get a divorce.” The earnings allegedly came after Mr. Cohen told his then-wife that he had lost $9 million in a real estate investment, appearing convincingly “distraught.”
According to court documents, Ms. Cohen’s first lawyer “beat a hasty retreat” in December after Mr. Cohen’s lawyer sent him a threatening letter. The second lawyer’s work, she says, was “sprawling and confusing.” This time around, some people think that Mr. Cohen — who is worth more than $6 billion and is living comfortably in Greenwich, Conn., with his new wife and their five kids — should just settle.