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Hedge-fund billionaire Steve Cohen is really paying the price for that $155 million Picasso.
In the two weeks since he bought the artist’s 1932 painting “Le Reve” in one of the priciest art sales ever, the secretive hedge-fund billionaire and avid collector has been beset by bad luck.
Yesterday, a New York appeals court resurrected a lawsuit brought by his ex-wife, Patricia Cohen, accusing him of cheating her out of at least $2.75 million in their 1990 divorce. She is seeking damages of $8.25 million.
The court reinstated her claim after the FBI cuffed Michael Steinberg — one of Cohen’s top lieutenants at his hedge-fund giant, SAC Capital Advisors — and prosecutors charged him with insider trading last Friday.
A day before that, a federal judge balked at a record $602 million deal Cohen hashed out with the Securities and Exchange Commission to settle insider-trading charges against SAC and its CR Intrinsic unit.
Call it the curse of Picasso.
After years of coveting “Le Reve,” Cohen bought the prized painting, which translated means “The Dream,” in what appeared to be a gift to himself for making the insider-trading charge go away.
The masterpiece was owned by casino magnate Steve Wynn, who struck a deal for the first time to sell the painting to Cohen in 2006. The sale was scrapped after Wynn, who suffers from eye disease and poor vision, accidentally punched a hole in the painting with his elbow.
While Wynn repaired the painting, Cohen is having a harder time fixing his woes.
In a unanimous decision, a three-judge panel ruled that Patricia, the mother to Cohen’s two grown children, may pursue her racketeering and fraud case against him.
Patricia claims that Cohen — whose wealth is estimated at nearly $9 billion — hid $5.5 million he received for a soured $8.7 million real-estate deal in 1987 — the year before they separated. She claims Cohen lied to cheat her out of her half of the divorce settlement, in which she got less than $5 million.
She also accuses Cohen of engaging in insider trading while they were married and he was working as a trader at Gruntal & Co.
Her case was tossed by a Manhattan federal court in 2011 on the grounds that the statute of limitations had passed. But the appeals court said the clock only started ticking five years ago when she first learned of the alleged deceit.
Patricia said she only uncovered the real-estate deal in 2008 through a lawsuit between Cohen and Brett Lurie, his partner on the soured real-estate deal.
Her lawyer, Howard Foster, said he is “delighted” by the ruling. He said he intends to call Cohen and his brother Donald, who was also named in the suit, in for questioning.
“This is a procedural ruling and not a ruling on the merits,” Cohen’s spokesman said. “As we have said from the outset, these decades-old allegations by Mr. Cohen’s former spouse were patently false and entirely without merit. We will continue to defend against them vigorously.”