Authorities are investigating whether Steve Cohen’s SAC Capital Advisors may have profited from insider tips on the popular diet company Weight Watchers, according to a report.
Government officials are investigating the $14 billion firm’s trading in Weight Watchers in early 2011, the report said.
During the period under investigation, the diet company’s stock price nearly doubled, the report by Reuters claimed.
Regulatory filings shows SAC owned 2.1 million shares of Weight Watchers as of March 31, 2011. The stock hit a peak of $85.25 two months later. It had been trading at $38 a share at the start of the year.
A spokesman for the Securities and Exchange Commssion didn’t return a request for comment, nor did a spokeswoman with the FBI in New York.
An SAC spokesman said last night the firm is unaware of any probe involving SAC and Weight Watchers.
Reuters said the inquiry is in the “early stages” and that it’s unclear whether “anything improper was done by SAC Capital or Cohen himself.”
SAC has been a target of the government’s widespread insider-trading probe for several years and received a subpoena along with a slew of other hedge funds in 2010.
Officials of the Stamford, Conn., trading giant last month told investors and employees that SAC could be sued by the SEC. Also last month, a former employee was arrested on insider-trading charges.
The SEC’s warning about the possible suit, a so-called Wells Notice, centered on Mathew Martoma, the former trader with SAC’s CR Intrinsic unit, who has been accused of trading on confidential drug data.
Cohen hasn’t been charged with any wrongdoing and wasn’t named in the SEC’s Wells Notice.