(CN) – The ex-wife of one of America’s richest men sued her former husband in New York, saying billionaire hedge fund manager Steven Cohen used fraud to hide millions from her during their divorce. Patricia Cohen says her ex, with a reported net worth of $6.4 billion, made a lot of his money from insider trading.
Steven Cohen’s firm, SAC Capital Advisors, which is also named as a defendant, has about $14 billion under management, according to published reports.
All told, he owns or controls at least 25 domestic and of-shore entities, which Business Week has described as a “highly secretive and stupendously successful” group of funds.
Patricia Cohen, who married Steven Cohen in 1979 and left him 9 years later, claims her ex “consistently and systematically” defrauded her through repeated acts of mail and wire fraud. She seeks at least $100 million.
Patricia Cohen says she discovered her former husband may have been concealing assets after he was profiled by “60 Minutes” in March 2006. Subsequent investigation revealed more unflattering media profiles – including a Fortune profile that described Gruntal, a firm with which her husband was affiliated, as a “den of corruption” – and also revealed bank accounts, mortgage holdings, real estate transactions and deals that Cohen had not disclosed, Patricia Cohen says.
She says her ex-husband’s fraudulent concealment of activities, which ranged from compelled testimony before the U.S. Securities and Exchange Commission to multimillion-dollar investments in co-op apartments in Queens, was “consistent with a pattern of highly secretive conduct that has long characterized his business and personal affairs.”
As recently as Dec. 4, Reuters reported that “SAC places a premium on secrecy” and that defendant “Cohen is so intensely private he hates being photographed and has even brought the rights to some pictures taken by freelancers.”
The SEC summoned Cohen to explain profitable trades he made before General Electric bought RCA in early 1986. During that testimony, Cohen declined to answer many questions, citing the Fifth Amendment, according to the complaint.
But Patricia Cohen said her husband told her of the pending deal in late 1985. She says he told her that he wasn’t engaging in insider trading because while he knew the inside source of the information was a Wharton classmate, he received the tip he acted on from an intermediary.
Patricia Cohen claims that a financial statement her ex-husband provided to the court during their divorce proceedings in 1988 “was materially false and misleading,” that it failed to disclose a bank account in Miami and the activities of hedge funds he controlled.
She says an affidavit Steven Cohen filed as divorce proceedings continued into 1991 was also false and misleading.
Named as defendants are SAC Trading Corp. SAC Capital Management Inc.; SAC Capital Management LP; SAC Capital Management LLC, SAC Capital Associates LLC, Sigma Capital Management LLC; and Cohen’s brother, Donald.
Patricia Cohen is represented by Paul Batista of New York.