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The Morning Brief: Steve Cohen’s Chump Change for Picasso's Le Rêve; Another Key Officer Jumps JC Penney Ship

Nothing like paying a $616 million fine and having change left over to buy a Picasso for $155 million. SAC Capital’s Steven Cohen, after settling insider trading lawsuits with the Securities and Exchange Commission last week, bought the artist’s world famous “Le Rêve,” an oil painting depicting Pablo Picasso’s mistress, Marie-Thérèse Walter, for an amount roughly a fourth of what he paid the government, a news report said.  You may recall this is the same painting that casino magnate Steve Wynn elbowed, leaving a six-inch gash on the canvas, a day after he agreed to sell it to Cohen for $139 million in 2006. Notwithstanding the previous damage, which was repaired, the price tag Cohen wound up paying is said to be the most ever paid by a U.S. collector for a painting.

Meanwhile, Cohen has injected himself into the controversial battle between Walter Energy and the British hedge fund firm Audley Capital Advisors, led by Julian Treger. SAC Capital Monday evening reported a 5.4 percent passive stake in the coal company. Audley previously announced plans to nominate five directors at the April 25 annual meeting. Audley has questioned the board’s role related to what the hedge fund calls questionable financial decisions and poor management.

Federal prosecutors have brought insider charges against another former hedge fund employee and his source of information. According to Preet Bharara, the U.S. Attorney for the Southern District of New York, David Riley a former chief information officer and vice-president for Foundry Networks, provided material, nonpublic information concerning Foundry to Matthew Teeple, an analyst for an unnamed hedge fund family based in San Francisco. Altogether, Teeple played a role in trades that resulted in profits of over $16 million and enabled the hedge fund firm to avoid losses exceeding $11 million. The government also announced the unsealing of the guilty plea of a third person, John Johnson, to conspiracy and securities fraud charges in connection with the insider trading scheme. He pled guilty to the charges on March 18. In a separate action, the Securities and Exchange Commission announced civil charges against Riley, Teeple and Johnson.


Shares of J.C. Penney fell for the sixth straight day Tuesday after its vice president of strategic marketing decided to decamp for Home Depot. Lisa DeStefano-Orebaugh is leaving the struggling retailer that William Ackman’s Pershing Square Capital Management has bet heavily on . That makes her the third high-profile person to leave that division, according to Bloomberg News. The stock closed at $15.00, close to its recent low of $14.43.

Another day, another correspondence in the face off between activist hedge fund Jana Partners and Canadian fertilizer maker Agrium. “Agrium is hoping that scare tactics and illogical arguments will get you to vote against the highly-qualified and independent nominees Jana Partners has proposed for a minority of its board of directors,” Jana wrote. Somehow April 9 can’t come soon enough for either side.

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