Goldman Sachs will make a personal loan to Great Neck native Steven Cohen that will be backed by the hedge fund owner’s $1 billion art collection, according to regulatory filings.
Goldman Sachs filed a notice with the Connecticut secretary of state on Feb. 28 stating that it would lend an unspecified amount of money to Cohen, who faces mounting legal fees and fines related to the SAC Capital hedge fund, in exchange for “certain items of fine art.”
The filings do not specify which paintings are part of the loan.
Cohen has received similar loans from other banks in the past, including Deutsche Bank AG. Cohen paid off that loan last year and ended his credit line with the bank, according to published reports.
Goldman Sachs will be making the loan through a private bank that lends money to wealthy individuals, according to a Bloomberg News report.
Cohen, an alumnus of Great Neck North High School, is an avid art collector.
In March of 2013, amid an insider trading probe of SAC Capital, Cohen made headlines for a $155 million purchase of Picasso’s “Le Reve.”
Cohen reportedly frequented many art galleries and stores in Great Neck.
In October of 2013, the New York Times reported that Cohen sold off several pieces of his art collection, including two Andy Warhol paintings and an abstract work by Gerhard Richter. Cohen sold the Reichter painting for $26.5 million and a Warhol painting that sold for $20.3 million, according to published reports.
Cohen’s Connecticut-based hedge fund, SAC Capital, pleaded guilty in November to charges of insider trading.
A federal judge last month accepted a plea deal from Cohen’s company, which has now been renamed Point 72 Asset Management, that would force it to shut its doors to outside investors and pay a $1.2 billion penalty – $900 million in fines and $300 million in forfeited profits.
But Cohen did not have to pay the full amount of penalty for 90 days under the terms of the plea deal, according to an April New York Times report.
Cohen will also be allowed to pay $284 million of the penalty within 35 days rather than the usual days, the Times reported.
The extension allows Cohen’s company to continue to trade in the stock market until the deadline ends in mid-July, according to the Times.
Even after paying the $1.2 billion penalty, Cohen is expected to have a personal fortune of about $9 billion, which will be managed by Point72.
Cohen, 57 ,has not been accused of any criminal wrongdoing, but has been named in a Securities and Exchange Commissions lawsuit accusing him of not properly supervising his employees.
The SEC alleges that Cohen failed to prevent employees that he directly supervised from making illegal trades, despite having prior knowledge of their intentions to do so. Cohen allegedly made more than $200 million in profits through insider trading.
The SEC is seeking to bar Cohen from ever overseeing outside money again.
Eight of Cohen’s employees have been convicted of insider trading, including the most recent conviction of Matthew Martoma in February. Federal prosecutors in that case were able to link Cohen to Martoma’s inquiries into experimental Alzheimer’s medication.
The two reportedly had a 20-minute phone call a day before the hedge fund sold two drug stocks, which prosecutors said helped SAC generate profits of $275 million in July 2008.
Martoma repeatedly refused to tell FBI agents what he and Cohen discussed during the phone call.
In December, U.S. Attorney Preet Bharara got a conviction of Michael Steinberg, also an alumnus of Great Neck North High School, on four counts of securities fraud and one count of conspiracy.
“Like many other traders before him who, blinded by profits, lost their sense of right and wrong, Steinberg now stands convicted of federal crimes and faces the prospect of losing his liberty,” said Bharara in a statement following Steinberg’s conviction.
Steinberg worked as a portfolio manager for Cohen and was convicted of receiving confidential information about Dell and Nvidia stocks, which he then used to generate $1.4 million in profits.
Cohen and Steinberg are also major philanthropists.
Steinberg helped to found Natan, which, according to its website, “supports entrepreneurial organizations that demonstrate an innovative approach to addressing the challenges facing Jews around the world” by giving out grants.
The Steven and Alexandra Cohen Children’s Medical Center of New York in New Hyde Park, which is part of the North Shore-LIJ Health System, and a center at Mt. Sinai Hospital in New York City are named after Cohen and his wife.
