Former SEC Chairman Arthur Levitt told Bloomberg Television on Tuesday morning that if he were running a firm, he would not take SAC Capital's Steven Cohen as a client.
Levitt joined Bloomberg to discuss yesterday's guilty plea by SAC to securities and wire fraud and the record $1.8 billion penalty. He went on to say insider trading was a "pervasive" problem and that this situation was "not unique," predicting that "we will see more of this under the present leadership of this [Securities and Exchange] commission and the U.S. attorney."
Former SEC Chairman Levitt on the significance of the record SAC penalty:
"This is real theater. This is David vs. Goliath. Little Mary Jo White takes on great big Stevie Cohen and not just for a day or a week or a month, but for years, and her tenacity, her toughness has delivered what a great SEC chairman should deliver. It's an admission of guilt at long last that she has brought to the SEC, and it hasn't had that in 30 years. And highly visible Stevie Cohen who has done everything he possibly could to go in her face."
On whether Steven Cohen has been found to do anything wrong:
"The curtain hasn't fallen get on Stevie Cohen. The whole notion of failure to supervise is part of the fiber of the securities business. It is inconceivable that Cohen wasn't aware of some of the goings on and didn't build the culture of insider trading that permeated that company. This is not the last act, but it is a very important intermission."
On whether companies like JPMorgan and Goldman Sachs should continue doing business with SAC:
"I think they probably have to continue to do business because I understand there are some firms that haven't left Cohen yet and cannot leave them in the wilderness. The question is, and I think that should be posed, would they take Stevie Cohen as a customer tomorrow if they weren't doing business with him? If I was running a firm, I would say "No way."
