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The Morning Brief: Steven Cohen Said to Be Mulling SEC Settlement

Steven Cohen, the head of Point72 Asset Management, formerly known as SAC Capital Advisors, is considering settling civil charges brought against him by the Securities and Exchange Commission, according to CNBC. Any deal will hinge on the length and terms of a ban on Cohen managing investor funds, according to the report. It seems a sweeping ban from the securities industry could prevent him from even trading his family office’s assets or managing his employees, terms Cohen is vehemently opposed to. Meanwhile, his firm is awaiting its settlement with the Justice Department to be finalized. In July the SEC alleged that Cohen “failed to reasonably supervise two of his senior employees, who engaged on insider trading under his watch” and “failed to take reasonable steps to investigate and prevent such violations.”

Macro hedge funds have reversed their negative bet on the U.S. dollar and are now going long the greenback, according to a CNBC report, citing a BofA Merrill Lynch Global Research report. They also took off their short position on 10-year U.S. Treasuries and are now neutral on the asset class. Most major macro funds are down between 2 percent and 7 percent so far this year, according to the report. BH Macro Ltd., which invests most of its assets in the London-based Brevan Howard Master Fund, is down 2.92 percent through March 21. The biggest loser so far this year seems to be Fortress Macro Fund, down 7.10 percent through March 14.

UBS raised its price target on hedge fund favorite Microsoft to $46 from $43. “Shareholder activism, coupled with strong enterprise sales performance and new visibility into a burgeoning cloud business, put new life in the shares, but it was the surprise resignation of CEO Steve Ballmer that really drew investor interest on the intriguing prospect of MSFT under new leadership,” the bank tells clients in a new report. “We see early encouraging signs by new CEO Satya Nadella that this is a new era of MSFT defined by a new mindset, the recipe we believe for the stock to work.” Microsoft is a major holding of Jeffrey Ubben’s ValueAct Capital.

Deutsche Bank raised its target price on Darden Restaurants to $49 from $47. However, it maintained its Hold rating, citing limited upside from its planned spinoff of Red Lobster. The bank, however, does not mention that activist hedge fund firm Starboard Value is vehemently opposing that split. “The more critical driver of value creation, fundamental improvement at Olive Garden, remains elusive,” it adds in a note.

Starboard Value filed a revised 13F report for December 31, 2013 to reflect an 850,000-share stake in chemical maker LSB Industries worth nearly $35 million. It did not report any position in the stock when it initially filed its 13F in mid-February.

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