You've obviously read the story on Bloomberg about the big art robbery in Zurich; paintings by Cezanne, Degas, Monet and Van Gogh worth more than $163 million were stolen. It's a big deal if you give a shit about obscure art museums in third-rate European cities. Reporters Marc Wolfensberger and Linda Sandler note that three burglars--packing heat and wearing ski masks--lifted Monet's ``Poppies Near Vetheuil,'' Degas' ``Count Lepic and his Daughters,'' Van Gogh's ``Blossoming Chestnut Branches'' and Cezanne's ``Boy in the Red Vest'' from the Buehrle Foundation half an hour before closing yesterday afternoon. Scandalous, we thought, and yet, not really enough information to solve the case.

Then, a lightbulb—we'd made friends with a well-placed guard at that very museum during our semester abroad junior year. We made a call, and after about ten minutes of bullshitting and acting like we were just calling to see how he was doing and not for a favor, we casually mentioned the incident. He was reluctant at first to give up any details—he said the burglar later called from a secure line (203-890-2000) and through heavy breathing that would seem to imply the person on the other end wasn't in the best of shape, told him, "If you tell anyone about this I’ll fucking kill you," but I assured him nothing he told me would end up in the public record. Here’s what he said:

"All points bulletin described the third suspect as a portly gentleman, late 40s or early 50s, dressed in black, coke-bottle glasses visible beneath ski mask. Distinguishing features: cookie crumbs cascading down the front of his zip-up sweater, haunting blue eyes. When confronted by gawking, photo-taking tourists at the gallery, the fleeing suspect promised to 'pay good money for the rights to those snapshots.' A small shark figurine was found at the scene."

Draw your own conclusions. We've drawn ours.

Zurich Gang Grabs $163 Million Art Haul From Museum [Bloomberg]

SAC suffered two high level departures today when both its president and chief financial officer announced they were departing. James Rowan, the chief financial officer, is leaving to become the chief operating officer of Ren Tech. The president, Brian Cohn has no plans. Supposedly his departure has come as a surprise to the firm.

SAC employees we spoke to moments ago had no idea that either man had left, so to the rank and file traders both departures come as a surprise. Of course, these surprised traders also couldn’t give us any dish about why Cohn was departing so suddenly because they had no idea he was already out the door.

Cohn, Rowen Depart SAC Capital [Wall Street Journal]

CNBC’s Senior Testes and Estrogen Correspondent Charlie Gasparino, who just can’t get enough of this stuff, reports that SAC trader Ping Jiang probably lost 200 million last year. At one point, Ping was Stevie-boy Cohen’s second highest earner. Where did things go wrong? The obvious answer is not enough E, and not that his "top secret training program" of skin tight tube tops and miniskirts on the floor was distracting Ping from executing profitable trades. Paulson Capital can attest to this, as they posted a 52% return in 2007 after reinstating their cross-dressing/estrogen-injection regimen following a disappointing 2006. And that’s all I have to say about that.

Latest on Merrill, Citi Layoffs and SAC Capital Scandal [CNBC]

Does he wear color contacts or are Stevie Cohen's eyes really that blue? (And check out all that chest hair! Kind of ironic, isn't it?)

In a terrific display of holiday togetherness, the employees of SAC Capital convened in Stamford last night to bask in the mediocrity and obscurity of the past year. To create the perfect atmosphere for such an event, the holiday gala was held in a plastic tent behind the company's headquarters. Despite their better efforts, however, everyone seemed to have a good time, fueled by a live reggae/soul band (interesting choice) and several PMs dispensing bonuses by raining hundreds from a platform over the crowd (no one is really sure whether this was actually their bonus or if they will still be receiving one today). The whole night was summed up in the inspiring, albeit slurred, drunken cry overheard as people piled into taxis outside of the after party: "I can't believe we fucking work at SAC. I mean, I'm a total idiot, you saw me tonight. And yet here I am." A breakdown by the numbers:

Tonight’s parties are Citi at Paramount Bar (6 pm), BNP Paribas at South Street Seaport (7 pm), Jay Goldman & Co. (7:30 pm) at Del Posto, and Choice Energy at Bruno Jamais (5:30 pm) but WAY MORE IMPORTANTLY: SAC Capital in a tent behind the Stamford headquarters. We really feel like we should go but Jesus fucking Christ, Stamford? Additionally we don’t want go make the trek by ourselves and our roommate can’t go, even though we impressed upon her that this party is more or less her Everest. (The weak excuse? Tonight she has a date and afterwards will be knee-deep in planning her "big birthday orgy. Entry fee is waived for anyone who can prove yearly net income over $500,000. Oh, and Anal_yst is invited. And that guy from Hamilton.”)

In other news, the Lehman review:

“fid got off to a slow start. equities got started fast, then got too drunk to keep going. admins danced until the music died. damn dj. and then it emptied out to the after parties. fid was starting up at around 8 but then died fast too. everyone's nervous about bonuses. equities thinks they're gonna subsidize fid. fid is resigned to their fate. oh and no live band this year.”

Earlier: The Secret To SAC's Success?

DealBook has a nice little post today that more or less confirms our longstanding suspicion that Andrew Ross Sorkin wants to die. In it, Sorkin-- or one of the many Mini Sorkins who represent him-- recalls the recommendation SAC Capital gave to TD Ameritrade a few months ago RE: combining with another online brokerage firm like E*Trade Financial, because it would “dramatically increase long-term shareholder value" and "assume only moderate credit risk."

The last few months have shown this particular piece of advice to not necessarily be the "best" SAC's offered in its illustrious history. But instead of gently, ever so gently saying that while making sure to kiss ass at the same time, like we did just now, Sorkin goes out of his way to point out that had Ameritrade heeded SAC's counsel, the results would've been "disastrous" and that, in his estimation, and I'm paraphrasing here because I don't want to even click back to the DealBook article for fear of being implicated in the whole thing, "Stevie Cohen is no more than a glorified day trader who couldn't execute a profitable trade if he were hopped up on female hormones and wearing a dress."

We're not saying he's wrong (unless Stevie or any of the Tonton Macoutes he has working out of his office are reading this, in which case, WHAT AN IDIOT), or that he shouldn't feel free to express his opinion (again: ARS is the reason I am against the First Amendment), but jesus christ, Sorkin, you don't mess with a guy who once killed a bunch of kids selling lemonade for fifty cents to rally his troops after a down month. (If you have to taunt, taunt guys who are afraid of their own shadows, like Global Alpha. They'll never hurt you.) Yes, you have your God-given ability, as a Jew, to win street fights, but he does too, so it's cancelled out. And then all you're left with is the fact that he operates under the belief that the taste of human flesh in his mouth is good for business, and that "legend" about him killing an analyst with his bare hands "on a lark." We've said it before but now, more than ever, it bears repeating-- Sorkin, sleep with one eye open.

Analysis: Beware Hedge Funds Bearing Advice [DealBook]

CNBC reports that the federal Equal Employment Opportunity Commission has taken the unusual step of performing “on-site” interviews at SAC Capital, on account of the fact that the accusations levied by a former junior trader, Andrew Tong, that his boss, Ping Jiang, forced him to, among other things, take female hormones and dress like a woman, are more fucked up than the run of the mill, “they fired me because I’m Jewish” cases the agency is used to. Jiang, as well as his entire trading staff, have been questioned, and the EEOC is expected to decide whether or not to join the suit in the coming weeks (enough affirmative responses to the question, “Did Tong ever ask you if you found his top ‘too cleavy’ for the office?” ought to do it).

The EEOC is also said to be thinking about expanding its inquiry into the hedge fund’s attitude toward women, after one employee told the Post, “If taking female hormones actually helped you do your job, they would simply hire women here...But they don't.” Oh, and Tong’s allegations now include being “tied up” by Jiang. Additionally, CNBC notes that the US Attorney for the Eastern District of New York has interviewed Tong about trading activities at the fund, and that Stevie Cohen is going to castrate the associate that let this story get out today at 4, in an unintentionall homage to Jiang's trading philosophy that men need to be more like women.

Earlier: The Secret To SAC's Success?
Feds Get In On The SACtion
The Absence of a SAC?

Trader's Sex/Hormones Claims Being Investigated [CNBC]

Andrew Tong, the former SAC trader who has accused his old boss Ping Jiang of forcing him to take female hormones, etc, has now allegedly produced “scientific evidence to corroborate the traumatic events that form the basis of his claims,” which, you may recall, caused him to dress like a woman and have sex with a man (and that his lawyer said were “not salacious,” but merely “outside the box”).

'HORMONE' GUY'S NEW SEX CLAIM [NYP]

Great headline, right? There’s more where that came from. Anyway, according to papers files yesterday, the federal Equal Employment Opportunity Commission is now investigating allegations that a SAC trader was required to take female hormones as part of a senior trader’s “top secret training program.” For those of you who don’t have Google alerts set up for “some pretty fucked up shit,” Andrew Tong, who was fired last year from the hedge fund, has accused Ping Jiang of sexual harassment that had Tong taking female hormones (which he bought on the black market) in order to reduce aggressiveness and make him more effeminate, and, in turn, a better trader. Additionally, there’s been talk of “sexual relations between two men.” Tong has also stated that the hormones caused him significant emotional and physical distress, as well as impotence.

The Post reports that those who know Jiang, still running SAC’s computer trading at its Madison Avenue offices, are surprised by the accusations. “He was a very bright, quiet loner…an aggressive trader who like to take big positions,” said a former Lehman exec (where Jiang and Tong first met, nine years ago). Another former Lehman Brother, and Jiang sympathizer speculated that "[Jiang’s] strategy might have rubbed [Tong] the wrong way, but the most successful people in hedge funds are intense and single-minded," presumably referring to Jiang’s more legal trading strategies. Meanwhile, a third former Brother (and DealBreaker reader) countered that Jiang is a “maniac” and said that the allegations seem “plausible.”

Up in Stamford, SAC employees are flummoxed. Not by the accusations, per se, but the rationale behind them. "If taking female hormones actually helped you do your job, they would simply hire women here," one said. "But they don't.”

For his part, Stevie Cohen is apparently angry, or at least embarrassed, and supposedly dispatched his minions to go from “desk to desk to try and find out who leaked it...like a witch hunt." In accordance with his personality, Stevie will have no compunction over burning anyone alive, which he's said to have done before, "for lesser things."

Jiang/SAC’s lawyers called the allegations "salacious and false." Tong’s lawyer, sort of awesomely, countered that the allegations are "neither salacious nor false." False? Perhaps not. Salacious? We think so. One wonders what other sort of cases Tong's lawyer may have covered that would make him so openminded.

Earlier: The Secret To SAC's Sucess?
Sartorial Behavior Modification At SAC?

Two In The SAC [New York Post]

In May, we told you about the allegations of sartorial behavior modification at SAC Capital Management. Former SAC employee Andrew Z. Tong had accused current SAC employee (and top trader, and Yoko Ono neighbor) Ping Jiang of sexual harassment that included enrollment in a “top secret training program,” and the elimination of Tong’s alleged personality flaws by requiring him to wear “certain kinds of clothes to work.” No one got back to us regarding whether or not leather was involved and we pretty much forgot about the whole thing, the night terrors involving Stevie Cohen, spandex and warm-up suits notwithstanding. Today, Charlie Gasparino, because he tracks this sort of thing, brings us an update.

-- Apparently, one aspect of the “program,” guided by Jiang’s belief that traders are too aggressive and should be more effeminate, had Tong taking female hormones, which he bought on the black market.

-- According to Tong, as a result of the hormones, he suffered emotional and physical distress, and started wearing women’s clothes. He also said that he was unable to perform sexually with his wife, with whom he was trying to have a baby.

-- Other forms of harassment allegedly included “sexual relations between two men.”

Not surprisingly, SAC and Jiang have denied the charges, and said in a statement:

”SAC conducted a thorough investigation and found these scurrilous accusations to be false. We will vigorously defend ourselves and are confident that these claims will be swiftly rejected in arbitration.”

Sources at the firm told Gasparino that Tong was fired for cause in April 2006, though whether or not the “cause” was his inability to even feign enthusiasm at being forced to wear a dress is unclear. (We know—not funny, just sick. It’s a defense mechanism sometimes employed in uncomfortable situations so back off you don't know my life!)

On a lighter note, this whole thing makes the rumors about Cohen leaving the dismembered body of a (former) analyst floating in tank of formaldehyde on the Stamford trading desk, "as a motivational technique," not seem so bad, eh?

Earlier: Sartorial Behavior Modification at S.A.C.?

Tong v S.A.C. Capital Mgt., LLC

SAC Capital Harassment Suit [CNBC]

Capital International, the largest fund in Stevie Cohen’s cabal at $8 billion, fell 3 percent in August, reducing its YTD return to (a measly, for Stevie) 10 percent. The insignificance of this fall (to a return that's still pretty damn good) is both welcome (everyone sick of “so and so is down” stories say “I,” unless it’s Pirate, because those guys have it coming) and depressing, because it means Stevie won’t think twice about purchasing the latest offering from Damien Hirst—$4,000 jeans decorated with a skull pattern made of Swarovski crystals. (To be fair, they really do make his ass look great.)

SAC also raised $1 billion from investors last month, increasing the firm’s assets to $15 billion.

SAC Raised $1 Billion in August as Fund Declined 3% [Bloomberg]

Stevie Cohen (may be) a sell-out. Yes, the man who has made his money through a combination of massive, rapid trading in US securities and “If you tell anyone about this, I’ll end you” secrecy is considering selling upwards of 20% of SAC Capital, his $14 billion hedge fund. The Financial Times reports that the fund has been shopping stakes in its management company to a number of Asian state funds like Temasek. Or maybe it's the other way, and the Asians are asking to buy a piece of Cohen. It is unclear at the time whether SAC will sell one or two large stakes or a couple of baby stakes adding up to 20. Word is that Lehman is helping put together the deal.

SAC declined to comment. And the FT story contains all the usual verbal parachutes that it can rely on if the story turns out to be wrong. But we’ve been hearing similar rumors for the past several weeks. One source tells us that the fund may be planning an equity sale for September/October, but would likely step up its timeline if the news becomes public (i.e…now).

We'd also heard that Cohen's donation of the Damien Hirst shark tank to the Met was part of an image remake in advance of an equity offering of some sort. We dismissed this and privately decided that he just wanted to show Citadel founder Kenneth Griffin that he isn't the only one rich enough to donate small fortunes to the local art museum. Boy do we have egg on our face now.

Speaking of hedge funds and formaldehyde, the International Herald Tribune this morning anoints Hirst as a hedge fund manager: "Hirst...has gone from being an artist to being what you might call the manager of the hedge fund of Damien Hirst's art."

SAC Capital considers sale of stakes [FT]

It’s no secret that Stevie Cohen and S.A.C. Capital Management like to keep secrets. Cohen owns the media rights to publish his photographs, makes traders in his group swear on their lives that they won’t disclose any information, never shares his ideas with others and types all correspondence in ǃ’OǃKung.

A New York County Supreme Court decision from May 17, 2007, regarding the alleged sexual harassment of former S.A.C. employee, Andrew Z. Tong, by current S.A.C. employee (and top trader, Yoko Ono neighbor), Ping Jiang, reveals a thin layer of understanding from the culture of secrecy and freakishness onion up in Stamford, CT. Tong first met Jiang back in 1998, when they were both working in the emerging markets department of Lehman Brothers. They went their separate ways in 2001 but kept in touch, and in 2005, Jiang offered Tong a job at S.A.C. Tong took the job, and worked there until his termination, effective April 10, 2006, later claiming that during that time he was subjected to sexual harassment, a hostile work environment, discrimination and retaliation by defendants. So far, so good (there’s nothing ground breaking about sexual harassment, it happens at all the best firms, if you’re lucky).

Some details in the court documents, however, cause pause:

On July 24, Tong met with Jiang both alone and with other members of Jiang's group. Jiang told Tong about his top secret training philosophy, which was to include a program of strict confidentiality and the elimination of Tong's alleged personality flaws by requiring him to wear certain kinds of clothing at work.

What is this “top secret training philosophy”? What kinds of clothes eliminate personality flaws? Are they made of spandex? And if so, are they bike shorts? With piping down the side? Warm-up suits? CORDUROY?? And is this why S.A.C.’s been so successful? Have any of our various hedgie readers ever unwittingly (or wittingly) taken part in something like this? Get it off your chests immediately. We’ve respected Cohen’s don’t ask, don’t tell policy long enough.

Tong v S.A.C. Capital Mgt., LLC

Nice pump up speech for hedge funds in today’s Hedge Week (we’re not going to make our ‘hedge’ quota by 5 without your help). Despite industry leaders “prophesying an end to the industry,” George Soros saying hedge funds are too over-exposed, Stevie Cohen (immune to self-inflicted irony) noting that the days of big returns are over, Warren Buffett taking hedge funds to task for their high fees in his annual letter to shareholders, and performances in general being down, Hedge Week’s Shoham Cohen still thinks everything will work out if we just think positively!

There are good managers (James Simons) and there are bad managers (Tom Hudson, the guys who do Goldman’s Alpha), Cohen perceptively notes, but given the hotness of HFs, the look-on-the-bright-side news is that every day a new manager emerges (today: Tim Sykes, tomorrow: Tom Sikkes). 1 pt: hedge fund sustainability.

Yes, there are a lot of strategies performing quite badly, of late. But that just means managers will have to work harder to diversify. This is not an obstacle for Cohen, this is an opportunity. And how about numbers, those are always good. First quarter of 2007: $60 billion from global investors. Since hedge funds were invented: $1.6 trillion managed. Big numbers—that’s got to mean something.

The person whose job is predicated on the survival of hedge funds also predicts that the future will allow “personal hedge funds pools to be created” and that there will be room for “tailored managed funds whereby fund managers will open private hedge funds.” Cohen wants you to know that this new era will be an exciting one, and if all you would-be managers out there will peel yourselves up off the bathroom floor, pump yourself full of some happy pills, “overcome the psychological barrier in setting up a fund, and come out with new strategies” and tell yourselves, “I will sell this house today!” we can begin our journey. Together, assembled brotherhood of Neo-HF’ers.

An Apocalyptic Turn for Hedge Funds? [Hedge World]

Roddy Boyd today reveals some interesting-ish similarities between two seemingly dissimilar investors—Stevie-boy Cohen and Carl Icahn.

Rabble-rouser extraordinaire Carl Icahn has found a wingman in fellow billionaire Steve Cohen when Icahn has acquired stakes in some of his most recent high-profile targets.

In the past few months, filings detailing Icahn's headline-grabbing investments in WCI Communities and Take-Two Interactive Software have been followed by disclosures by Cohen's $6 billion SAC Capital about investments in the same companies.

The coincidence has raised eyebrows in the hedge fund community because the two billionaire hedge fund titans could not have more different investment styles.

Just how closely the two men are linked philosophically will be put to the test with Take-Two: The Post has learned that over the past few trading days, Icahn sold his entire 2.9-million share stake, making him the second big shareholder in the past month to dump shares in the videogame maker. Glenview Capital is rumored to have reduced its nearly 3 million-share stake.

Horrible imagery of Cohen and Icahn being each other’s “wingmen” aside, what does all this mean?

a.Just that Cohen and Icahn share a mutual love of, among other things, Grand Theft Auto.

b.Cohen sees Icahn as a father figure and wants to emulate daddy in every way possible.

c.Icahn—flirting with senility—has run out of investing ideas of his own and now simply waits to see what the younger, more virile Cohen’s doing and then quickly does the same, adding in a dose of “You’re a moron” and “I could do this job better than you, I could do this job better than all of you!” for good measure and to throw people off his game.

d.The two, tripping on mushrooms and freaking out after hallucinating visions of Tom Hudson awash in pirate garb and Gretchen Morgenstern in some sort of mermaid getup one afternoon, came up with a crazy scheme that would “bring Wall Street to its feet,” to be revealed at a future date.

ICAHN-OCLASTS [NYP]

As previously noted this morning, private equity will be the hot chick at the party in ’07. But we didn’t realize that she’d be so hot that Stevie-boy Cohen would dip his fingers in her womanaly charms. But we’ve been not-clairvoyant before so, uh, this is nothing new (though upsetting all the while). As The Street’s Matthew Goldstein reports:

In a somewhat surprising move, Cohen's $12 billion SAC Capital Partners behemoth is stepping up to the plate to help finance a $3.1 billion management-led buyout of Laureate Education. The Connecticut-based hedge fund is part of a group of investors taking the higher education company private in a deal led by Laureate CEO Douglas Becker, Kohlberg Kravis Roberts and Citigroup's private equity arm.

Shift for SAC's Cohen [thestreet.com]

Remember, back in November, when there were all those rumors about a hedge fund in trouble, and even though Citadel vehemently—almost suspiciously so—denied that it was them, people were still kind of like “Sure, it’s not you, Citadel, we believe you” wink, wink? Apparently, according to Bloomberg, they weren’t bluffing. (SAC Capital pretty much cleared its name, too, but who cares about looking good to other hedgies when you've got a $54 million party-foul to deal with?)

Hedge funds run by Steven Cohen and Kenneth Griffin gained more than 30 percent last year, the industry's best performance since 2003, while Goldman Sachs Group Inc.'s flagship fund declined for the first time in seven years.

Cohen's SAC Capital Advisors LLC returned 34 percent and Griffin's Citadel Investment Group LLC also topped 30 percent, helped by energy bets it took over after Amaranth Advisors LLC collapsed in September, according to investors in the funds. Goldman's Global Alpha Fund ended the year with a 6 percent loss.

Citadel, SAC Funds Double Returns of Peers as Goldman Declines [Bloomberg]

Bloomberg’s reporting today that Steve Wynn is suing Lloyds of London for $54 million, the amount of the claim he submitted after he stuck his elbow through a Picasso that SAC Capital founder Stevie Cohen had agreed to buy for $139 million.

We don’t know. We like to think that if we put our elbow through a Picasso we’d do a lot more than wreck 1/3 of the thing. What kind of girly elbows does Wynn have, anyway?

But nonetheless we’re making a note to ourselves that if we ever find ourselves as guests at Stevie Cohen’s place, we’re keeping our gestures tight to the body and not pointing at anything at all.

Wynn Sues Lloyd's After Claiming $54 Million for Picasso Tear [Bloomberg]

It’s no news that our top hedge fund guys are going in big for high-priced art but it is news that some of them are starting to move from private collections to taking larger roles at our public museums. We’ve already touched on Citadel founder Ken Griffen’s endowment of the “Kenneth and Anne Griffin Court” at the Chicago Art Institute. Today the New York Times focuses on Stevie Cohen protégé David Ganek, who went on to found Level Global Investors. It seems Ganek has been recruited to be a Guggenheim trustee and a recently succeeded in raking in $4 million, making him the museum’s top fundraiser.

Getting hedge fund kings to raise money for you is probably not a bad idea. For one thing, these guys know how to get the wealthy to open their wallets. What’s more, they have lots of other rich guys who work for them. And it never hurts to throw some dollars at the bosses favorite charity.

But what’s in it for them? The answer to that question is also the answer to the question asked by DealBook in response to a New York Observer feature on New York’s most powerful families—namely, “Where Have The Wall Street Dynasties Gone?” There’s not one prominent Wall Street or hedge fund family—other than a few names with historic ties to finance but not really actively involved—on the list. And don’t you believe for a second that its because guys and gals pulling in $25 million or more a year don’t want to be considered prominent or powerful. These art museum wings, rotundas and board memberships are all about getting on the list of important families.

It’s kind of nice to know that even in this day and age of money culture, sometimes just earning it isn’t enough. It’s what you do with it.

SAC Capital, the Greenwich hedge fund run by Stevie Cohen, says copper mining king Phelps Dodge is worth more than Freeport McMoRan Copper & Gold has agreed to pay for it, and is putting its money where its mouth is—picking up at least 5% of the companies shares. The story of SAC's investment was first reported in the New York Post. SAC confirmed its acquisition in filings with the SEC this morning.

Here's how SAC describes its plan to oppose the Freeport McMoRan Copper & Goal acquisition.

SAC Capital Associates, SAC Select, SAC MultiQuant, SAC Meridian and CR Intrinsic Investments originally acquired Common Stock for investment in the ordinary course of business because the Reporting Persons believed that the Common Stock, when purchased, was undervalued and represented an attractive investment opportunity.

The Issuer announced on November 19, 2006, that it had entered into a definitive agreement to merge with Freeport-McMoRan Copper & Gold Inc. ("FCX"). The Reporting Persons believe that the terms of the proposed FCX transaction would not provide full and fair value to the Issuer's shareholders and would deprive them of their ability to maximize the return on their investment. The Reporting Persons believe that the proposed FCX transaction offers few, if any, synergies to the combined operation, and would use the Issuer's balance sheet to fund the purchase in what is essentially a public recapitalization that would create disproportionate value for FCX shareholders at the expense of the Issuer's shareholders. In addition, the Reporting Persons believe there is unrecognized long term value that the Issuer's shareholders would forego if they sold their shares at FCX's proposed terms. Accordingly, the Reporting Persons currently intend to vote against the proposed FCX transaction.

Sac's Schedule 13D filing [SEC]

A bid by SAC Capital's Stevie Cohen to hire away energy trader Brian Hunter may have been "the first domino" in the series of decisions that eventually led to the collapse of Amaranth, the Greenwich, Connecticut-based hedge fund brought down in September by bad bets on energy futures, according to a report from Bloomberg this morning.

Here's the lede:

Nicholas Maounis, founder of the Amaranth Advisors LLC hedge fund, made a decision in April 2005 that eventually cost him his firm.

His promising natural-gas trader, Brian Hunter, had been offered a $1 million bonus to join Steven Cohen's SAC Capital Advisors LLC. Maounis, who had built his Greenwich, Connecticut- based fund to $6 billion in assets, didn't want Hunter to go.

Convertible bond and equity prices were falling and oil and natural gas prices were increasing, making Hunter's expertise more valuable. So Maounis named Hunter co-head of the energy desk and gave him control of his own trades.

But you really should read the whole thing. There are lots of details about Amaranth's internal controls (or lack thereof) and investment diversification (or lack thereof).

The dog that doesn't bark in this article, however, is named Harry Arora. Harry was an Enron Zombie—an energy futures trader at the now infamously collapsed Houston company who had found new at Amaranth. He ran the hedge fund's energy trading desk, leaving right around the time Brian Hunter got his big promotion. What's unclear is whether Harry was forced out to make room for Brian, whether he left rather than share leadership of the desk with Brian or whether he was leaving anyway. He went on to start his own energy fund, Arcim Advisors.

[Editors note: The picture above the left represents Brian Hunter. And some other guy holding him up for the camera.]

Amaranth's $6.6 Billion Slide Began With Trader's Bid to Quit [Bloomberg]

Stevie-boy has said that he makes 90% of his money from 5% of his investments. We hope he's trying to make money with this art stuff because the alternative--that someone would actually like to have stuff like this painting hanging around their home--is too horrible to contemplate.

From the New York Times:

As records were being broken at contemporary art auctions this week, the hedge fund billionaire Steven A. Cohen privately scooped up a de Kooning “Woman” painting for roughly $137.5 million, adding to the prestige of a personal collection that is fast becoming one of the world’s greatest.

Landmark De Kooning Crowns Collection [New York Times]

Lawyers for SAC Capital reportedly turned in Michael Lair when he approached them claiming to be an investigator for Biovail, and offering to produce evidence of the drug company’s “illegal and unethical” investigative techniques, the New York Post's Roddy Boyd reports this morning. SAC is the most notable target of a lawsuit launched by Biovail claiming that hedge funds were conspiring to push down its stock price. A subsequent investigation by federal authorities revealed that Lair was allegedly playing both sides of battle—peddling information on SAC to Biovail, as well.

Lair’s now been arrested but it’s not exactly clear what law he violated. Is “being a total dick” a federal crime?

Scammer Played Both Sides in Biovail Case: Feds [New York Post]

Page Six details the latest crimes of hedge fundsters against art. Well, this time it wasn’t actually a hedge fundster who was responsible for the damage. It was allegedly casino operator Steve Wynn who put his hand through “Stevie Baby” Cohen’s Picasso, according to Page Six.

DID casino king Steve Wynn put his elbow through a Picasso? Sources said Wynn was hosting a cocktail party in his penthouse at the Wynn Las Vegas for the likes of Barbara Walters, Louise Grunwald, Georgette Mosbacher, David and Mary Boies, Henry and Nancy Silverman, Nora Ephron and Nick Pileggi, and Tatiana and Serge Sorokko. "It was a Picasso from the Blue Period, worth $140 million, which he had just sold to hedge-fund billionaire Steven Cohen," said one source. Wynn gallantly told his guests, "I'm glad that was me." The canvas was rushed off for repairs on a 6-inch tear. Wynn's rep said, "We don't have any information on this."

Update: We can't really put up an item about Pablo Picasso without linking to the all time best thing about the artist. That's right. It's Jonathan Richman's song, "Pablo Picasso."

A few years ago we felt like a sophisticated, cultured high-roller when we flew out to Chicago for a weekend to catch a well-reviewed special exhibit at the Chicago Art institute. At least, that was the impression we were hoping to leave on the pretty young woman we flew out with us. And it kind of worked. She still smiles when Chicago comes up in conversation, and thinks of the Art Instititue as our special place.

According to a press release, we aren't the only ones who have tried this trick. Citadel founder Kenneth Griffin had his first date with his wife at the Art Institute. And so he just donated $19 million to help fund a new Modern Art wing at the the museum. It’s centerpiece will be a two story central court named the “Kenneth and Anne Griffin Court.”

“Anne and I are delighted to be able to help the Art Institute build the Modern Wing, a freestanding addition to the museum campus that we believe will be one of the world’s great museum buildings,” he said in the statement. “We visited the Art Institute on one of our first dates. For us, our relationship with this great, encyclopedic museum can be described as ‘love at first sight.’”

Suddenly springing for dinner at Charlie Trotter's doesn't seem as impressive. $19 million and your own two-story central court. How do you compete with that?

Oh, and just in case you were thinking of trying, Ken follows this up by dropping $80 milliion to buy Jasper John’s “False Start” from David Geffen. (Geffen also just sold a de Kooning to SAC Capital’s Stevie Cohen for $63.5 milliion.) Thanks man. You've ruined it for all of us.

Art Institute gets $19-million donation [Crain's]

Works by Johns and de Kooning Sell for $143.5 Million [New York Times]

The Steven Cohen profile we mentioned earlier is not surprisingly drawing increased attention to Cohen’s investments. One of the first things we did after reading the story was pull up the SEC website and search for filings disclosing SAC investments. (Ed: Hey—maybe this is the whole reason Cohen opened up to the journal, because he wanted to attract some attention, and additional investment money, to the investment’s he’s already made. JC: Woah. Slow down there. Even we aren’t that cynical. Yet.)

Today Peter Cohan of Blogging Stocks takes a look at SAC accumulation of more than 5% of AC Moore Arts & Crafts Inc, a money losing arts and crafts company. Cohan tries to figure out what Cohen might be thinking in making such a large investment in the company (although he admits that if he knew why Cohen made his investment decisions he’d probably live in a bigger house).

The short of it is that Cohen may be looking at three factors: timing (the stock was way down when he bought it and rose shortly afterwards), undervaluation (six analysts were projecting big growth for the company when Cohen bought in), and seasonality (the company tends to do well in the fourth quarter while losing money in the first three). Each is more fully explained on Blogging Stocks.

This kind of analysis goes along with what the Journal article suggests—that Cohen may be adopting a more fundamental based investment strategy.

Who is Steve Cohen and why is he betting on art supplies? [Bloggingstocks.com]

When we started this thing over here at DealBreaker, one of our metrics for determining whether the existing financial journalism was doing a good job was whether or not people knew the name Steven Cohen. A man whose hedge fund, SAC Capital, can be responsible for up to 2% of all Wall Street trading activity on a given day surely deserves to be a household name. But, sadly, we discovered almost no-one outside of the immediate world of Wall Street and hedge funds knew about Cohen.

Part of this was Cohen’s doing, so it’s not entirely fair to blame the financial press. He’s been famously media shy. So we were pleasantly surprised on Saturday morning to open up our copy of the Wall Street Journal’s weekend edition and find a profile of the Greenwich resident. Not just any profile—but a lengthy profile that included interviews with Cohen, his family members, as well as looks inside his home and office.

Our favorite part was learning that Cohen’s mother—until her death last year—regarded Cohen as lazy. She believed that the family’s foremost financial expert was Cohen’s brother, a Florida accountant. Never mind that Cohen was the fourth highest paid hedge fund manager. Why wasn’t he in a nice, normal and secure profession like accounting?

Less juicy, but perhaps more relevant to the markets, is the news that Cohen might be switching strategies. Long famous as a fast-trigger trader, getting in and out of positions quickly based on market direction predictions, Cohen indicates he may be moving to other strategies, including holding some positions for up to a year. His reasoning is clear enough—with more and more funds looking to make fast money on under-priced assets, the opportunities are becoming ever scarcer.

The Hedge-Fund King Is Getting Nervous [Wall Street Journal]

A late night update (11:30PM) from yesterday's planespotter:

...Another Gulf-IV arrived (owned by a Banc of America leasing company but not the bank itself - no word on occupants) at Centennial from Teterboro on Tues, 6:59 PM MDT. The G-V registered to SAC stopped at Kansas City (KMCI) for at least the day in the afternoon and has stayed there until now.