Cohen, S SAC

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</font></div><div><font size="4" face="Times New Roman" /><div><font size="4" face="Times New Roman"><b>Here's Why People Are So Angry That Billionaire Steve Cohen Is Spending Millions to Help Veterans</b></font></div><div>The hedge fund billionaire’s efforts to assist veterans with PTSD have thrust him into a political fight.</div><div>By Isaac Arnsdorf / ProPublica August 3, 2018</div><div>
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</div><div><span style="background-color: rgb(255, 255, 102);">At a House hearing last year on post-traumatic stress disorder, a private organization showed up with an ambitious plan to help suffering veterans. The Cohen Veterans Network was opening a chain of free mental health clinics across the country, backed by $275 million from hedge fund billionaire Steve Cohen.</span></div><div><span style="background-color: rgb(255, 255, 102);">
</span></div><div><span style="background-color: rgb(255, 255, 102);">By contrast to the high-profile scandals at the U.S. Department of Veterans Affairs, the Cohen Network claimed 96 percent client satisfaction. In a statement for the hearing, the organization said its clinics “provide a desirable alternative” to the VA — a clear echo of President Donald Trump’s campaign promise to let veterans skip the VA for “a private service provider of their own choice.”</span></div><div>
</div><div><b>But at that same moment, across the country, the Cohen Network was closing its clinic in Los Angeles less than a year after it opened. The Cohen Network’s leaders had alienated the staff there, former employees said, by telling them to prioritize healthier patients over homeless veterans. The shutdown was so hasty that former therapists said it left some patients in the lurch.</b></div><div>
</div><div><span style="background-color: rgb(255, 255, 102);"> </span></div><div><span style="background-color: rgb(255, 255, 102);">Privatization has become the defining controversy at the VA under the Trump administration. Conservative billionaires such as the Koch brothers and Ken Langone want veterans to increasingly see private doctors, while traditional veterans organizations want to maintain the government-run health system.</span></div><div><b>
</b></div><div><b>The Cohen Network has become a test case for both sides. It is either proof that the private sector can do the job better than the VA — or a template for diverting taxpayer dollars to unaccountable private groups.</b></div><div>
</div><div>Steven Cohen is perhaps an unlikely person to find himself in the crossfire of this debate. He is best known as the billionaire hedge fund titan whose investment returns were the envy of Wall Street, until prosecutors busted his firm for insider trading. (Cohen, 62, was not personally charged; he declined to be interviewed for this article.) Since then, Cohen has launched a new hedge fund and opened 10 clinics serving veterans across the country.</div><div>
</div><div><span style="background-color: rgb(255, 255, 102);">A thorough examination of the Cohen Network’s record — including internal documents, emails and dozens of interviews with current and former employees — reveals a different story from the one the Cohen Network tells about itself. The clinic at the University of Southern California was doomed by the Cohen Network’s mismanagement and insistence on a narrow focus that helped only a subset of veterans, </span>former employees said. “The model we ended up believing would really serve veterans was different than the model the Cohen Network was proposing all clinics operate under,” said Marv Southard, who served as CEO of the Cohen clinic at USC and is now chair of USC’s doctor of social work program. The network’s original clinic, at New York University, got into a spat over who would own the patent rights from research that Cohen funded. And shortly after the hearing, Cohen mounted an aggressive lobbying campaign to get the government to subsidize the clinics.</div><div>
</div><div>The Cohen Network and Cohen’s own spokesman insist they’re not trying to privatize the VA and their only goal is helping veterans. “No single private person in this country has ever donated more money to save veterans’ lives and treat their mental health needs than Steve Cohen has,” Cohen’s spokesman, Mark Herr, said. The organization blames others for the problems in Los Angeles, New York and Washington.</div><div>
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</div><div>The story of the Cohen Network illustrates what could lie in store for veterans as Trump pursues his campaign pledge to place their care in the hands of the private sector.</div><div>
</div><div><span style="background-color: rgb(255, 255, 102);">When the Cohen Network opened the LA clinic in mid-2016, it attracted talented therapists with what appeared to be a rare opportunity to treat veterans as if money were no object. “It almost seemed too good to be true,” one of the clinicians said. “And, in fact, it was.”</span></div><div><span style="background-color: rgb(255, 255, 102);">
</span></div><div><span style="background-color: rgb(255, 255, 102);">The disappointment started as soon as the staff showed up. The clinic turned out to consist of a hallway shared with the dermatology department inside a USC facility. There were only three therapy rooms for six therapists; they were supposed to take turns and then walk to a different office several blocks away.</span></div><div>
</div><div>The next problem was the software for the patients’ medical records. Many of these systems are clunky, but clinicians said this one was the worst they’d ever used. They would fill out a long form and click submit, only to find their session had timed out and they had to start over. Session notes mysteriously vanished. “It was completely substandard compared to what we would have expected from this organization,” said Kathryn Arnett, the clinic’s director.</div><div>
</div><div>The Cohen Network’s CEO, Anthony Hassan, shot down complaints about the software, so staff across the network convened secret conference calls to troubleshoot, according to former employees. In written responses to questions, Hassan said it’s “absurd and untrue” that he lashed out at employees who spoke up about the software. He also denied it ever had problems, saying “there was no bug in the system.”</div><div>
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</div><div>But a February 2017 internal review concluded otherwise: “There are ongoing clinical data errors in the system,” Cohen Network officials wrote.</div><div>
</div><div>Because of these problems, some current and former employees doubt the Cohen Network’s claims about its results. The client satisfaction survey, for example, was completed by only 6 percent of exiting patients, according to an October 2016 email from the network’s chief operating officer. The Cohen Network said the response rate has since risen to 59 percent. Still, that’s lower than typical for published studies and it means the score might not represent all patients’ views, particularly since there’s evidence that happier patients are more likely to complete the survey. (“We’re confident in the integrity of our data,” Hassan said, but he declined to elaborate on how they inspect and validate the data.)</div><div>
</div><div><span style="background-color: rgb(255, 255, 102);">The Cohen Network wanted more patients and was displeased with low turnout: An internal review found that the LA clinic, in its first six months, saw just 116 clients, which cost the clinic $10,282 each. “The average cost per client is very concerning, as is the low client count,</span>” two executives wrote. Some of the clinicians had seen an emphasis on cost and volume at public agencies or cash-strapped nonprofits, but they struggled to understand such scrimping from the well-funded Cohen Network.</div><div>
</div><div>The Cohen Network’s focus on measurable outcomes influenced the care that the clinics would provide. Clinicians were supposed to use a set of six- to 15-week treatment programs that have been shown to help with PTSD, insomnia, depression and anxiety.</div><div>
</div><div>But patients often have multiple conditions that don’t fit neatly into 12 weekly sessions. The Cohen Network’s limited scope led some other organizations that serve veterans to stop referring people there. “I didn’t think their model invested enough in engagement and after-care and focused too much on short-term intervention,” said Southard, who led the Los Angeles County Department of Mental Health for 17 years before becoming CEO of the Cohen clinic at USC. “The biggest disjuncture between USC’s vision and the Cohen network’s vision,” he said, “was we were aiming at people with more serious issues and problems and we needed a model that would serve them.”</div><div>
</div><div>The Cohen Network’s focus on measurable outcomes for PTSD led the LA clinic to shun some of the neediest patients. Because of the clinic’s location in a gritty part of downtown Los Angeles, many veterans who walked in were homeless. Homeless patients were hard to follow up with, which could be a drag on the clinic’s metrics. In an internal memo, Cohen officials chastised the staff for “targeting inappropriate client populations (e.g., transient/homeless, chronically mentally ill).”</div><div>
</div><div>Clinic staff were devastated. “All of us came here believing we were going to help the people who need us the most, and they said no,” said Arnett, the USC clinic’s director. “They weeded out the most compromised veterans.” This is exactly what the VA’s defenders have long warned would happen to veterans left to the private sector.</div><div>
</div><div>Hassan countered that the clinic simply wasn’t equipped to treat people with chronic mental illness or who needed inpatient treatment for drug addictions. “Our network provides short-term outpatient psychotherapeutic care delivered through weekly or biweekly sessions,” he said. The Cohen Network, he added, is intended to fill in gaps in the existing system, not to replace it.</div><div>
</div><div>Steve Cohen arrived to tour the clinic in October 2016, with a New York Times photographer in tow. A spokesman said Cohen was “impressed by the effort made by USC,” but people who were present recall it differently. Cohen didn’t like how small the clinic was, they said. He didn’t like that people needed to be buzzed in (a security measure). He didn’t like the neighborhood. As Arnett recalled it, “He said, ‘Why can’t we have this?’ and “Why isn’t it like that?’ He took a few pictures and stayed less than half an hour.”</div><div>
</div><div>In response to Cohen’s dissatisfaction, staff looked into moving the clinic to more affluent Pasadena, which would be more expensive and cater to a different kind of client.</div><div>
</div><div>In June 2017, Hassan emailed the staff to say the clinic was closing, with no explanation. The abrupt shutdown cut off some patients in the middle of treatment, according to three former clinicians and three other former employees. Clinicians said they had some patients who had just completed intake or opened up about a traumatic experience for the first time. The therapists had to tell them they couldn’t continue. For his part, Hassan insisted that no patient’s treatment was interrupted and that USC was supposed to tell the Cohen Network about any patients who needed their treatment to be extended.</div><div>
</div><div><b>The therapists tried to find referrals for all the patients to continue treatment elsewhere, but there wasn’t always another provider available.</b> The Cohen Network sent a list of resources, printed on expensive paper, but the therapists said it wasn’t helpful. “It looked like someone had Googled ‘mental health Los Angeles’ and picked the top three results,” a third former clinician said.</div><div>
</div><div>The Cohen Network initially said the clinic would reopen, but as the months went by it never did, and eventually Los Angeles disappeared from the map on its website. “We just ghosted,” a former employee said. “We just split town, and what about all of these patients? The really bad part is, nobody seemed to care.”</div><div>
</div><div>Cohen got involved in veterans’ health for the most personal of reasons: His son Robert joined the Marines and deployed to Afghanistan in 2010. It was “obviously, as a parent, a very scary thing,” Cohen has said. “Now, he came back, he’s fine, but not every vet is.” For Cohen — whose interests until that point were limited to trading stocks, collecting art, spending time with his family and rooting for the New York Yankees — it was a life-changing experience, according to a person close to him. Cohen established his first veterans clinic at NYU in 2013.</div><div>
</div><div><b>That was the same year his hedge fund, SAC, pleaded guilty to insider trading</b>. Prosecutors circled Cohen for almost a decade, nabbing eight of his lieutenants (although some of those convictions were later overturned). In one case, a trader got a sneak peek at discouraging clinical trial results affecting two pharmaceutical companies. Cohen had $700 million riding on those stocks. The trader called Cohen, who then liquidated his position and bet $260 million that the stocks would fall. When the results of the clinical trial became public, the trade netted SAC about $276 million, the biggest profit from insider trading ever.</div><div><b>
</b></div><div><b>The trader, Mathew Martoma, is serving a nine-year sentence, but he refused to testify against Cohen, so prosecutors could not prove whether or not he told Cohen anything about how he got his information. </b>They indicted SAC as a company, but not Cohen personally. The Securities and Exchange Commission sought to ban Cohen from the hedge fund industry for life, but settled on a two-year hiatus. (This cat-and-mouse game loosely inspired the Showtime series “Billions.”)</div><div><span style="background-color: rgb(255, 255, 102);">
</span></div><div><span style="background-color: rgb(255, 255, 102);">Cohen opened a firm called Point72, which was initially a family office that managed his own $11 billion fortune, and has since begun to manage money for outside investors.</span> He printed a mission statement and list of core values — starting with “Ethics & Integrity” — on a big poster for the staff to sign. He hired a 55-person compliance team that now reads all of his emails and routinely restricts trades, according to Herr, Cohen’s spokesman. “We have the most aggressive compliance and surveillance department on Wall Street,” Herr said. “It would be hard to have done more than we have.”</div><div>
</div><div>The staff of the nonprofit Cohen Veterans Network, which was formally launched in 2016, works in the same building, outfitted like the traders in branded fleeces. “It’s almost as if I’m one of the portfolio managers. I’m just not making money, I’m spending money,” Hassan once told a Bloomberg reporter. “We very much feel part of the firm.”</div><div>
</div><div>Cohen got started at NYU when Ken Langone, the name donor of the university’s hospital system, connected him with Charlie Marmar, the chair of the psychiatry department. Marmar, who’d spent 21 years at the San Francisco VA, had an idea not only for a mental health clinic but for research on the biological signs of PTSD. Cohen and Marmar discussed the vision over poached eggs and coffee at Cohen’s Greenwich mansion, where Cohen dazzled Marmar with the Picassos on the walls and the Warhol in the bathroom, two of Marmar’s colleagues recalled.</div><div>
</div><div>The mission, as one researcher involved in the project described it, was to find a<b> “pregnancy test for PTSD”</b>: a blood test or a brain scan that could be used to diagnose PTSD, rather than relying on self-reported symptoms. Better understanding the biology might also lead to more effective treatments.</div><div>
</div><div>Some experts were skeptical that a biological test could work for a complex and varied psychiatric condition like PTSD. The Departments of Defense and Veterans Affairs had already sunk millions into pursuing PTSD biomarkers, with little to show for it. “We mostly rolled our eyes and said good luck,” said Terence Keane, director of the National Center for PTSD’s Behavioral Science Division at the Boston VA. “Why would that be what Steve Cohen wanted to put his money into?”</div><div>
</div><div>In Keane’s view, there were many more deserving research endeavors in need of funding. Still, a diagnostic test for PTSD, if one could be found, would have a clear market. Nearly a million veterans receive government checks based on a diagnosis of PTSD. So a functional test could decide how the VA distributes billions of dollars — and make a lot of money for whoever commercialized it.</div><div>
</div><div>Cohen launched a second nonprofit organization, called Cohen Veterans Bioscience, to lead the research. Its CEO, a former pharmaceutical executive named Magali Haas, sent researchers contracts asking them to sign over intellectual property rights, according to three people who reviewed the agreements.</div><div>
</div><div>That caused friction with NYU researchers and lawyers, who objected to what they viewed as the Cohen group’s revenue grab — or wanted the university to share in the possible windfall, according to a person present for conversations on this point. NYU declined to comment.</div><div>
</div><div>In recent years, foundations have shown increasing interest in possible commercial applications of research they support. Major philanthropies, such as the Bill & Melinda Gates Foundation, the Andrew W. Mellon Foundation and the MacArthur Foundation sometimes retain a license to use inventions they’ve funded, much as the federal government does, while working to ensure that the discoveries benefit the public. Others, like the BrightFocus Foundation, have pushed further, seeking royalties from discoveries they fund.</div><div>
</div><div>But it’s rare, experts say, for foundations to seek total control over intellectual property developed by the academics whose work they fund. Universities typically object because they consider themselves more qualified to use the IP to advance research and benefit the public. And since foundation grants typically don’t cover universities’ full costs including overhead, they don’t want to be in the position of subsidizing commercial research. “There were cases where industry was using this as a ploy to get a lower rate on research costs and get ownership of technology in a sweetheart deal,” said Wes Blakeslee, the retired director of the Johns Hopkins University Technology Transfer Office.</div><div>
</div><div>The disagreement over intellectual property led Cohen to stop funding Marmar’s research, according to two people involved in the project. Haas disputed that, saying in an interview that NYU didn’t get more money because it mismanaged the original grant. She then followed up with an email, this time saying the study ended because NYU finished recruiting subjects.</div><div>
</div><div>Cohen Veterans Bioscience moved on from NYU, scooping up existing biological samples and datasets, and funding top researchers. But some scientists said they turned down Cohen out of discomfort with the IP arrangements. “They have offended many people across the country,” said Keane of the National Center for PTSD. “The undercurrent is they’re trying to get a silver bullet to make money, and that’s why a lot of groups are not collaborating with them.”</div><div>
</div><div>Haas said Cohen Veterans Bioscience shares intellectual property rights with collaborators, but they’re still hammering out the details. “The only thing we’re interested in is trying to move the science forward,” she said. If the organization did have rights to an invention that it could license to a drug company to develop, she said, all the proceeds would fund future research.</div><div>
</div><div>Cohen’s spokesman, Mark Herr, said Cohen won’t invest in anything that arises from Cohen Veterans Bioscience’s work. “We maintain a church and state separation between the two, and that will not change in the future,” he said in a statement.</div><div>
</div><div>When Cohen started his collaboration with NYU, Langone and a fellow NYU trustee, former AIG CEO Maurice “Hank” Greenberg, told faculty members that the goal of the clinic was to create a private alternative to the VA, according to two people familiar with the discussions. “Langone and Greenberg were really into privatizing the VA, and the big motivation behind the Cohen clinic was to be proof of concept,” one of the people said. (Greenberg declined to comment. Langone’s spokeswoman referred questions to NYU, which declined to comment.)</div><div>
</div><div>Cohen wasn’t present for those meetings, and his spokesman said he doesn’t support privatizing the VA or envision the Cohen Network as a model for doing so.</div><div>
</div><div><span style="background-color: rgb(255, 255, 102);">Last year, Cohen set out to persuade Congress and the Trump administration to reimburse his clinics for veterans treated there<b>. (Cohen contributed $1 million to Trump’s inauguration and another $1 million to the House Republicans’ super PAC in April 2017.)</b></span></div><div>
</div><div>From the beginning, the Cohen clinics were advertised as free to patients, but the plan was always to start seeking reimbursement for their treatment. By their fourth year in operation, clinics are supposed to supply 25 percent of their own funding from insurance reimbursements, local philanthropy and government grants, according to information posted on the Cohen Network’s website. That figure rises to 50 percent by year six. In some cases, billing insurers also requires charging copays from patients.</div><div>
</div><div>Hassan said the clinics never turn away patients who can’t pay. He called collecting reimbursements a common-sense way to extend the reach of Cohen’s gift and make the clinics sustainable; like Haas, he said any revenues would be used to offset costs.</div><div>
</div><div>As part of his pursuit of government reimbursements, Cohen contacted fellow billionaire Ike Perlmutter, the enigmatic Marvel Entertainment chairman who has unofficially advised Trump on veterans policy. Cohen had a phone call with Perlmutter late last summer to sell him on the network, according to a person familiar with the call. Perlmutter questioned why Cohen would go to so much trouble to open brick-and-mortar clinics when other nonprofit organizations have leaner models, the person said. According to this person, Perlmutter warned then-VA secretary David Shulkin to be careful with Cohen. (Perlmutter’s representative declined to comment, and Shulkin didn’t answer requests for comment.)</div><div>
</div><div><b>Cohen also sought advice from a person who shaped President Trump’s position on the VA: Jeff Miller. As chairman of the House veterans committee, </b>Miller had been a harsh critic of the VA and promoter of private alternatives. He was one of the first lawmakers to endorse Trump and became the candidate’s point man on veterans issues. After Miller retired from Congress in January 2017 and joined a big law firm, his first lobbying client was Steve Cohen.</div><div>
</div><div>In September 2017, Cohen Veterans Bioscience flew researchers from around the country to a lavish summit in Washington, featuring a speech by Shulkin and a panel moderated by Miller. At a cocktail party at the National Portrait Gallery, Cohen lingered behind bouncers in a roped-off area, summoning people he wanted to talk to, an attendee recalls. A day after the summit, Cohen Veterans Bioscience held a briefing for congressional staff in the House veterans committee hearing room. Cohen Veterans Bioscience also joined a coalition with two pharmaceutical companies to lobby for access to VA datasets and biological samples.</div><div>
</div><div>Cohen’s representatives repeatedly complained to government officials that his clinics couldn’t get reimbursements from the VA. In one meeting, the leader of a veterans organization corrected Miller, pointing out that the Cohen Network could, in fact, enroll in a program for buying private-sector care (a program Miller had actually helped create). But that would require each patient to obtain advance approval from the VA. Miller made clear that the Cohen Network wanted to see the veteran first, then send the VA the bill.</div><div>
</div><div>Miller set out to change the law to let the clinics do exactly that. His team visited the office of every member of the House veterans committee and drafted a bill to let the VA pay for veterans who walk in to private mental health providers like the Cohen clinics. “Here is language to get you started,” they wrote in an email to congressional staff.</div><div>
</div><div>The lobbyists recruited a freshman lawmaker from each party, both former Marines, to sponsor their bill and tried to rush it through the House on a voice vote in time for Veterans Day.</div><div>
</div><div>But the bill raised objections from major veterans organizations. They generally oppose privatizing the VA because the health system remains popular with their members despite recent scandals. A few days later, the VA weighed in with more than a dozen concerns about the bill, including that it carved out a new private-care program conflicting with other laws on eligibility and funding.</div><div>
</div><div><span style="background-color: rgb(255, 255, 102);">Miller called a meeting with the major veterans groups to brief them on the bill. The veterans groups agreed among themselves to present a united front. Meanwhile, they pressured the Democratic cosponsor to drop out and waved other lawmakers off the bill. Miller caught wind of the counterattack, but by the time the veterans organizations showed up at his office overlooking the Capitol in late October 2017, the bill was dead.</span></div><div>
</div><div>Thwarted in Congress, Miller fared better with the Trump administration. He contacted senior VA officials in the hopes of forming a partnership with the Cohen Network. They signed an agreement in October 2017 that didn’t offer much other than to share data that was already publicly available. The VA has scores of similar agreements with other organizations.</div><div>
</div><div>But soon after the agreement was in place, Cohen’s representatives raised the issue of getting reimbursements for the clinics. That made VA officials feel tricked, according to a former agency official.</div><div>
</div><div>Veterans groups and some lawmakers were suspicious when they found out about the partnership. The Cohen Network “must be transparent about its organization and compliance with federal law,” the top Democrats on the House and Senate veterans committees wrote in a March 5 letter to Shulkin demanding more information.</div><div>
</div><div>Nevertheless, the Cohen Network succeeded in getting approved to receive reimbursements from the VA. A Cohen Network official downplays the payments, saying they’ve amounted to $500 so far.</div><div>
</div><div>But after Miller’s lobbying campaign, that does little to reassure defenders of the VA’s healthcare system. “The problem is there’s only so much government money in veterans’ care,” another former VA official said. “If you start trying to carve into that to feed things like the Cohen Veterans Network, that’s actually privatization. It’s going to be death by a thousand cuts.”</div><div>
</div><div>The resistance to the Cohen clinics is vexing for Cohen, who believes he’s trying to make a positive impact. “Steve Cohen is helping repay the debt we owe our veterans,” said his spokesman, Herr, “and it is shameful that anyone doubts or impugns his generosity.”</div><div><b>
</b></div><div><b>Cohen is undeterred. The network just opened its 10th clinic and plans to have 25 by 2020. Cohen believes the network is succeeding, Herr said, and is considering expanding his support beyond the $275 million he’s already committed.</b></div><div>
</div><div>Filed under:</div><div>
</div><div>The Trump Administration</div><div>Health Care</div><div>ProPublica </div></div><div><font size="4" face="Times New Roman"></font></div><div><font size="4" face="Times New Roman">
</font></div><div><ul style="margin: 0px 0px 20px 30px; padding: 0px;"><li style="margin: 5px 0px; padding: 0px; list-style-position: outside;"><font size="4" face="Times New Roman"><strong>Steve Cohen</strong> – Estimated worth: $13 billion. Contributions (with wife Alexandra) since 1989: $7.3 million</font></li></ul><p style="padding: 5px 0px; margin: 5px 0px;"><font size="4" face="Times New Roman">The founder Point72 Asset Management and his wife Alexandra distributed $6.7 million in 2016 by giving about half to pro-New Jeresey Gov. Chris Christie (R) super PAC <a href="https://www.opensecrets.org/outsidespending/detail.php?cmte=C00573055&cycle=2016" target="blank" style="background-image: initial; background-position: initial; background-size: initial; background-repeat: initial; background-attachment: initial; background-origin: initial; background-clip: initial; text-decoration-line: none;">America Leads</a> to help Christie’s presidential effort, and <span style="background-color: rgb(255, 255, 102);">donating to Clinton <b>after she dropped out</b>. As for candidates, once again Cohen didn’t discriminate by party, giving to lawmakers such as Rep. <a href="https://www.opensecrets.org/politicians/summary.php?cid=N00036023&cycle=2016" target="blank" style="background-image: initial; background-position: initial; background-size: initial; background-repeat: initial; background-attachment: initial; background-origin: initial; background-clip: initial; text-decoration-line: none;">Barbara Comstock</a> (R-Va.), Sen. <a href="https://www.opensecrets.org/politicians/summary.php?cid=N00036915&newmem=Y" target="blank" style="background-image: initial; background-position: initial; background-size: initial; background-repeat: initial; background-attachment: initial; background-origin: initial; background-clip: initial; text-decoration-line: none;">Kamala Harris</a> (D-Calif.) and Sen. <a href="https://www.opensecrets.org/politicians/summary.php?cid=N00001093&cycle=2016" target="blank" style="background-image: initial; background-position: initial; background-size: initial; background-repeat: initial; background-attachment: initial; background-origin: initial; background-clip: initial; text-decoration-line: none;">Charles Schumer</a> (D-N.Y.</span>).  The couple didn’t spend more than $200,000 in any of the previous three election cycles.</font></p></div><div><font size="4" face="Times New Roman"></font></div><div><font size="4" face="Times New Roman">icahn also john doe wi</font></div><div><font size="4" face="Times New Roman"><span style="font-family: " times="Times" new="New" roman="Roman" font-size="font-size" large="large" background-color="background-color" rgb="rgb">The documents show the governor and his fundraising team going after, and receiving cash from, many of the most prominent rightwing donors in the country. In addition to </span><a href="http://www.documentcloud.org/documents/3105984-2012-08-14-Exhibits-01-100-PT1.html#document/p74/a317508" target="blank" title="Guardian" style="text-decoration: none; font-weight: bold; outline: none;" times="Times" new="New" roman="Roman" font-size="font-size" large="large" margin="margin" px="px" padding="padding">Adelson</a><span style="font-family: " times="Times" new="New" roman="Roman" font-size="font-size" large="large" background-color="background-color" rgb="rgb">, there was business magnate Carl Icahn who was</span><a href="http://www.documentcloud.org/documents/3105985-2012-08-14-Exhibits-01-100-PT2.html#document/p4/a317509" target="blank" title="Guardian" style="text-decoration: none; font-weight: bold; outline: none;" times="Times" new="New" roman="Roman" font-size="font-size" large="large" margin="margin" px="px" padding="padding">approached</a><a href="http://www.documentcloud.org/documents/3105985-2012-08-14-Exhibits-01-100-PT2.html#document/p4/a317509" target="blank" title="Guardian" style="text-decoration: none; font-weight: bold; outline: none;" times="Times" new="New" roman="Roman" font-size="font-size" large="large" margin="margin" px="px" padding="padding"> for $100,000</a><span style="font-family: " times="Times" new="New" roman="Roman" font-size="font-size" large="large" background-color="background-color" rgb="rgb"> though nothing in the files indicates that he donated; the hedge-fund billionaire</span><b style="font-family: " times="Times" new="New" roman="Roman" font-size="font-size" large="large">Stephen Cohen, </b><span style="font-family: " times="Times" new="New" roman="Roman" font-size="font-size" large="large" background-color="background-color" rgb="rgb">who </span><a href="http://www.documentcloud.org/documents/3105984-2012-08-14-Exhibits-01-100-PT1.html#document/p98/a317510" target="blank" title="Guardian" style="text-decoration: none; font-weight: bold; outline: none;" times="Times" new="New" roman="Roman" font-size="font-size" large="large" margin="margin" px="px" padding="padding">arranged</a><a href="http://www.documentcloud.org/documents/3105984-2012-08-14-Exhibits-01-100-PT1.html#document/p98/a317510" target="blank" title="Guardian" style="text-decoration: none; font-weight: bold; outline: none;" times="Times" new="New" roman="Roman" font-size="font-size" large="large" margin="margin" px="px" padding="padding"> a wire transfer of $1m</a><span style="font-family: " times="Times" new="New" roman="Roman" font-size="font-size" large="large" background-color="background-color" rgb="rgb">; and Home Depot co-founder Ken Langone who </span><a href="http://www.documentcloud.org/documents/3105985-2012-08-14-Exhibits-01-100-PT2.html#document/p13/a317512" target="blank" title="Guardian" style="text-decoration: none; font-weight: bold; outline: none;" times="Times" new="New" roman="Roman" font-size="font-size" large="large" margin="margin" px="px" padding="padding">gave $25,000</a><span style="font-family: " times="Times" new="New" roman="Roman" font-size="font-size" large="large" background-color="background-color" rgb="rgb">....</span></font></div><div><div><font size="4" face="Times New Roman"></font></div><div><font size="4" face="Times New Roman">http://www.alternet.org/economy/meet-hedge-funders-and-billionaires-who-pillage-under-shield-philanthropy</font></div><div><font size="4" face="Times New Roman">
</font></div><div><div><font size="4" face="Times New Roman">Meet the Hedge Funders and Billionaires Who Pillage Under the Shield of Philanthropy</font></div><div><font size="4" face="Times New Roman">For every dollar they give, they take 44 from the rest of us.</font></div><div><font size="4" face="Times New Roman">By Lynn Stuart Parramore / AlterNet July 29, 2015</font></div><div><font size="4" face="Times New Roman">
</font></div><div><font size="4" face="Times New Roman">America’s parasitical oligarchs are masters of public relations. One of their favorite tactics is to masquerade as defenders of the common folk while neatly arranging things behind the scenes so that they can continue to plunder unimpeded. Perhaps nowhere is this sleight of hand displayed so artfully as it is at a particular high-profile charity with the nerve to bill itself as itself as “New York's largest poverty-fighting organization.”</font></div><div><font size="4" face="Times New Roman">
</font></div><div><font size="4" face="Times New Roman">British novelist Anthony Trollope once wrote, “I have sometimes thought that there is no being so venomous, so bloodthirsty as a professed philanthropist.”</font></div><div><font size="4" face="Times New Roman">
</font></div><div><font size="4" face="Times New Roman">Meet the benevolent patrons of the Robin Hood Foundation.</font></div><div><font size="4" face="Times New Roman">
</font></div><div><font size="4" face="Times New Roman">Robin Hood in Reverse</font></div><div><font size="4" face="Times New Roman">
</font></div><div><font size="4" face="Times New Roman">The Robin Hood Foundation, named for that green-jerkined hero of redistribution who stole from the rich to give to the poor, is run, ironically, by some of the most rapacious capitalists the country has ever produced — men who make robber barons of previous generations look like small-time crooks. Founded by hedge fund mogul Paul Tudor Jones, the foundation boasts 19 billionaires on its leadership boards and committees, the likes of which include this sample of American plutocracy:</font></div><div><font size="4" face="Times New Roman">
</font></div><div><font size="4" face="Times New Roman">-Hedge fund billionaire Steven A. Cohen, who, when he is not being probed for insider trading  (his company, SAC Capital Advisors, pled guilty to securities and wire fraud) is busy throwing parties for himself worthy of a Roman emperor at his Hamptons palace and bragging about his $700 million art collection. He suspends a 13-foot shark in formaldehyde from the ceiling his office, perhaps as an avatar of his business practices.</font></div><div><font size="4" face="Times New Roman">
</font></div><div><font size="4" face="Times New Roman">-Billionaire Home Depot founder Ken Langone, who threatened to turn off the charity donations if Pope Francis dared to continue criticizing capitalism and inequality, and also likened the plight of the wealthy in America to Nazi Germany. The GOP megadonor doesn’t care for bank regulation and it’s no surprise that he is the main booster for New Jersey Governor Chris Christie’s presidential bid, as his plan to shred Social Security is a fond wish of the tycoon’s.</font></div><div><font size="4" face="Times New Roman">
</font></div><div><font size="4" face="Times New Roman">- Hedge fund billionaire Stanley Druckenmiller, funder of right-wing causes who dedicates himself to spreading deficit hysteria and ginning up generational warfare on college campuses by trying to convince young people that they are being robbed by seniors using Social Security and Medicare. A long-time anti-tax crusader and supporter of such anti-labor enthusiasts as Wisconsin Governor Scott Walker, Druckenmiller warned President Obama that any attempt to tax the rich to pay for social services for the poor would be futile.</font></div><div><font size="4" face="Times New Roman">
</font></div><div><font size="4" face="Times New Roman">By occupation (the more useless and parasitical the better), it comes as no surprise that 12 of the 19 men in leadership positions at the Robin Hood Foundation happen to be hedge fund managers. A group called Hedge Clippers, supported by a coalition of labor unions and community groups and devoted to exposing how billionaires scheme to inflate their wealth and influence, has pointed out in a scathing report that the Robin Hood Foundation has close ties to an organization called the Managed Funds Association (MFA) that — shocker! —lobbies tirelessly for unjustified tax breaks for hedgies. Paul Tudor Jones’s top deputy, John Torell, chairs the MFA, and 31 members of Robin Hood’s governing board and leadership committees are executives at firms that belong to the highest membership levels of the organization.</font></div><div><font size="4" face="Times New Roman">
</font></div><div><font size="4" face="Times New Roman">The MFA was relatively small until 2007, when Congress started eyeing the “carried interest” tax loophole. Then it brought out the heavy artillery to protect elites from paying their fair share. The carried interest loophole is the MFA’s top priority.</font></div><div><font size="4" face="Times New Roman">
</font></div><div><font size="4" face="Times New Roman">The King of Scams...</font></div></div></div><div><font size="4" face="Times New Roman"></font></div><div><div class="headline" style="background-color: rgb(255, 255, 255);"><h1 property="dc:title" datatype="" class="node-title"><font size="4" face="Times New Roman">Robert Reich: The Disgusting Way Insider Traders Rig America and How Courts Let Them</font></h1></div><div class="the_body body_economy clearfix" style="background-color: rgb(255, 255, 255);"><div class="big_story_tools_bottom_container"><div class="authors_signup"><div class="talk_box"><font size="4" face="Times New Roman"><span class="small" /></font></div><div class="clear"><font size="4" face="Times New Roman"> </font></div></div><div class="clear"><font size="4" face="Times New Roman"> </font></div><div class="story_tools_bottom"><div class="text-size"><div class="story_tools_email"><div class="story_tools_print"><div class="story_tools_share"><div style="clear: left;"><div class="story-date"><font size="4" face="Times New Roman"><em><span class="field field-name-field-date field-type-date field-label-hidden"><span class="field-items"><span class="field-item even"><span class="date-display-single" property="dc:date" datatype="xsd:dateTime" content="2014-12-18T07:38:00-08:00">December 18, 2014</span></span></span></span> </em> |  </font></div><p style="margin-top: 8px; margin-bottom: 8px;"><font size="4" face="Times New Roman">A few years ago, hedge fund Level Global Investors made $54 million selling Dell Computer stock based on insider information from a Dell employee. When charged with illegal insider trading, Global Investors’ co-founder Anthony Chiasson claimed he didn’t know where the tip came from.</font></p><p style="margin-top: 8px; margin-bottom: 8px;"><font size="4" face="Times New Roman">Chiasson argued that few traders on Wall Street ever know where the inside tips they use come from because confidential information is, in his words, the “<a href="http://www.nytimes.com/2014/04/25/business/loosening-the-rules-on-insider-trading.html?_r=0" style="text-decoration: none; font-weight: bold; outline: none;">coin of the realm in securities markets</a> <span class="print-footnote">[2]</span>.”</font></p><p style="margin-top: 8px; margin-bottom: 8px;"><font size="4" face="Times New Roman">Last week the United States Court of Appeals for the Second Circuit, which oversees federal prosecutions of Wall Street, <a href="http://www.natlawreview.com/article/hello-newman-and-chiasson-second-circuit-decision-raises-bar-government-to-prove-lia" style="text-decoration: none; font-weight: bold; outline: none;">agreed</a> <span class="print-footnote">[3]</span>. It <a href="http://www.cnbc.com/id/102249787#." style="text-decoration: none; font-weight: bold; outline: none;">overturned</a> <span class="print-footnote">[4]</span> Chiasson’s conviction, citing lack of evidence Chaisson received the tip directly, or knew insiders were leaking confidential information in exchange for some personal benefit.</font></p><p style="margin-top: 8px; margin-bottom: 8px;"><font size="4" face="Times New Roman">The Securities and Exchange Act of 1934 banned insider trading but left it up to the Securities and Exchange Commission and the courts to define it. Which they have – in recent decades so broadly that confidential information is indeed the coin of the realm.</font></p><p style="margin-top: 8px; margin-bottom: 8px;"><font size="4" face="Times New Roman">If a CEO tells his golf buddy that his company is being taken over, and his buddy makes a killing on that information, no problem. If his buddy leaks the information to a hedge-fund manager like Chiasson, and doesn’t tell Chiasson where it comes from, Chiasson can also use the information to make a bundle.</font></p><p style="margin-top: 8px; margin-bottom: 8px;"><font size="4" face="Times New Roman">Major players on Wall Street have been making tons of money not because they’re particularly clever but because they happen to be in the realm where a lot of coins come their way.</font></p><p style="margin-top: 8px; margin-bottom: 8px;"><font size="4" face="Times New Roman">Last year, the top twenty-five hedge fund managers took home, on average, almost <a href="http://www.newyorker.com/news/john-cassidy/the-great-hedge-fund-mystery-why-do-they-make-so-much" style="text-decoration: none; font-weight: bold; outline: none;">one billion dollars each</a> <span class="print-footnote">[5]</span>. Even run-of-the-mill portfolio managers at large hedge funds averaged $2.2 million each.</font></p><p style="margin-top: 8px; margin-bottom: 8px;"><b><font size="4" face="Times New Roman">Another person likely to be exonerated by the court’s ruling is Michael Steinberg, of the hedge fund SAC Capital Advisors, headed by Stephen A. Cohen.</font></b></p><p style="margin-top: 8px; margin-bottom: 8px;"><font size="4" face="Times New Roman">In recent years several of Cohen’s lieutenants have been convicted of illegal insider trading. Last year Cohen himself had to pay a stiff penalty and close down SAC because of the charges, after making many billions. </font></p><p style="margin-top: 8px; margin-bottom: 8px;"><font size="4" face="Times New Roman">SAC managed so much money that it handed over large commissions to bankers on Wall Street. Those banks possessed lots of inside information of potential value to SAC Capital. This generated possibilities for lucrative deals.</font></p><p style="margin-top: 8px; margin-bottom: 8px;"><font size="4" face="Times New Roman">According to a <a href="http://www.businessweek.com/stories/2003-07-20/the-most-powerful-trader-on-wall-street-youve-never-heard-of" style="text-decoration: none; font-weight: bold; outline: none;">Bloomberg Businessweek</a> <span class="print-footnote">[6]</span> story from 2003, SAC’s commissions “grease the super-powerful information machine that Cohen has built up” and “wins Cohen the clout that often makes him privy to trading and analyst information ahead of rivals.”</font></p><p style="margin-top: 8px; margin-bottom: 8px;"><font size="4" face="Times New Roman">One analyst was quoted as saying “I call Stevie personally when I have any insight or news tidbit on a company. I know he’ll put the info to use and actually trade off it.” SAC’s credo, according to one of its former traders, was always to “get the information before anyone else.”</font></p><p style="margin-top: 8px; margin-bottom: 8px;"><font size="4" face="Times New Roman">Insider trading has also become commonplace in corporate suites, which is one reason CEO pay has skyrocketed. </font></p><p style="margin-top: 8px; margin-bottom: 8px;"><font size="4" face="Times New Roman">CEOs and other top executives, whose compensation includes piles of company stock, routinely use their own inside knowledge of when their companies will buy back large numbers of shares of stock from the public – thereby pumping up share prices — in order to time their own personal stock transactions.</font></p><p style="margin-top: 8px; margin-bottom: 8px;"><font size="4" face="Times New Roman">That didn’t used to be legal. Until 1981, the Securities and Exchange Commission required companies to publicly disclose the amount and timing of their buybacks. But Ronald Reagan’s SEC removed these restrictions.</font></p><p style="margin-top: 8px; margin-bottom: 8px;"><font size="4" face="Times New Roman">Then George W. Bush’s SEC allowed top executives, even though technically company “insiders” with knowledge of the timing of their company’s stock buybacks, to quietly cash in their stock options without public disclosure.</font></p><p style="margin-top: 8px; margin-bottom: 8px;"><font size="4" face="Times New Roman">But now it’s normal practice. According to research by Professor <a href="http://rooseveltinstitute.org/sites/all/files/Lazonick_Executive_Pay_White_Paper_Roosevelt_Institute.pdf" style="text-decoration: none; font-weight: bold; outline: none;">William Lazonick</a> <span class="print-footnote">[7]</span> of the University of Massachusetts, between 2003 and 2012 the chief executives of the ten companies that repurchased the most stock (totaling $859 billion) received 58 percent of their total pay in stock options or stock awards.</font></p><p style="margin-top: 8px; margin-bottom: 8px;"><font size="4" face="Times New Roman">In other words, many CEOs are making vast fortunes not because they’re good at managing their corporations but because they’re good at using insider information. It’s the coin of their realm, too.</font></p><p style="margin-top: 8px; margin-bottom: 8px;"><font size="4" face="Times New Roman">None of this would be a problem if the only goal were economic efficiency. The faster financial markets adjust to all available information, confidential or not, the more efficient they become.</font></p><p style="margin-top: 8px; margin-bottom: 8px;"><font size="4" face="Times New Roman">But profiting off inside information that’s not available to average investors strikes many as unfair. The “coin of the realm” on Wall Street and in corporate boardrooms is contributing to the savage inequalities of American life.</font></p><p style="margin-top: 8px; margin-bottom: 8px;"><font size="4" face="Times New Roman">If Congress and the Securities and Exchange Commission wanted to reverse this and remove one of the largest privileges of the realm, they could. But they won’t, because those who utilize those coins also have a great deal of political power.</font></p></div></div></div></div></div></div></div></div></div><div><font size="4" face="Times New Roman"></font></div><div><font size="4" face="Times New Roman">backlash/blowback on polit intel:</font></div><div><font size="4" face="Times New Roman">
</font></div><div><a href="http://www.alternet.org/print/news-amp-politics/how-dcs-political-intel-business-made-fat-cats-even-fatter"><font size="4" face="Times New Roman" color="#000000">http://www.alternet.org/print/news-amp-politics/how-dcs-political-intel-business-made-fat-cats-even-fatter</font></a></div><div><font size="4" face="Times New Roman">
</font></div><div><font size="4" face="Times New Roman"></font></div><div><font size="4" face="Times New Roman"><a href="http://www.cnbc.com/id/101165613">http://www.cnbc.com/id/101165613</a> record fine</font></div><div><font size="4" face="Times New Roman">==</font></div><div><font size="4" face="Times New Roman">Wealth: Steven A. Cohen is the founder and owner of SAC Capital Advisors, a Stamford, Connecticut-based </font></div><div><font size="4" face="Times New Roman">hedge fund that focuses mostly on equity market strategies. SAC Capital charges some of the steepest fees in </font></div><div><font size="4" face="Times New Roman">the business—3% of assets and 35% of profits on most funds. As of September 2011, Capital’s annual </font></div><div><font size="4" face="Times New Roman">returns increased 8% from $12 billion to $14 billion.102 </font></div><div><font size="4" face="Times New Roman"> </font></div><div><font size="4" face="Times New Roman">Power Networks: A major GOP donor that has resulted in leadership that blocks climate solutions at every </font></div><div><font size="4" face="Times New Roman">turn, as well as scoffing at the scientific consensus on climate. In August 2010, Cohen hosted a dinner at his </font></div><div><font size="4" face="Times New Roman">home for major Republican donors and hedge fund managers to strategize about how to help the GOP win </font></div><div><font size="4" face="Times New Roman">the midterm elections.103 In previous elections, Cohen’s SAC Capital was a big Democratic donor. One of his </font></div><div><font size="4" face="Times New Roman">primary beneficiaries was Sen. Christopher Dodd, chair of the Senate Banking Committee (the committee in </font></div><div><font size="4" face="Times New Roman">charge of financial regulations). Cohen serves on the Board of Trustees of Brown University and the Robin </font></div><div><font size="4" face="Times New Roman">Hood Foundation, which targets poverty in New York City. </font></div><div><font size="4" face="Times New Roman"> </font></div><div><font size="4" face="Times New Roman">Environment: Cohen is a major oil company investor and increased his petroleum investments in 2010. Oil </font></div><div><font size="4" face="Times New Roman">investments now account for 16 percent of Cohen’s total $9.7 billion holdings.104 SAC Capital is absent from </font></div><div><font size="4" face="Times New Roman">the Dow Jones Sustainability Index and CSR Hub.</font></div>