As the Corporation convenes this weekend for its triannual meeting, most of its 52 fellows and trustees have arrived on Brown’s campus. They range from President Christina Paxson to power players who make the news almost daily, like Brian Moynihan ’81 P’14, president of Bank of America.
But one Corporation trustee has garnered more than his share of recent headlines: Steven Cohen P’08 P’16, renowned art collector and erstwhile Wall Street kingpin whose hedge fund, SAC Capital Advisors LP, is reportedly on its way to paying out more than $1 billion to settle federal charges of insider trading.
In an email to The Herald, Marisa Quinn, vice president for public affairs and University relations, wrote that though she expected “strong participation at the October meeting,” she did not know whether Cohen would be in attendance. She added that 90 percent of Corporation members are expected to attend this weekend.
Federal prosecutors have charged eight current or former SAC employees with improper trading in the past few years and thus far have received six guilty pleas. SAC as a company was also charged this summer with insider trading.
If it pans out, the settlement would likely result in the downsizing of SAC to manage just Cohen’s personal fortune, which currently stands at roughly $9 billion — a sharp fall from SAC and Cohen’s former dominance in the hedge fund world.
But though the alleged insider trading at SAC has landed Cohen in hot water with prosecutors, who charged him in a civil suit this summer with “failing to supervise” his employees, University administrators have been nearly silent about how, if at all, his legal woes might affect his status on the Corporation.
“Steve Cohen is a valued and involved trustee of Brown, and the University has been strengthened by his engagement,” Chancellor Thomas Tisch ’76 said in a statement in March. “There has been no pressure on Steve — or the Corporation — for him to leave his seat.”
Though prosecutors have since brought civil charges against Cohen, Quinn referred to Tisch’s statement when asked for comment this week.
Pamela Bernard, vice president and general counsel at Duke University and an expert on university governance, said some university corporations have bylaw provisions that provide protocol for removing members, but rules vary among institutions. She added that she did not know anything about Brown’s Corporation rules and Cohen specifically.
Some members of the community have criticized the lack of action.
Dan Stump ’14 said Cohen “is the personification of everything that tanked the economy in the last 10 years,” and that he is indicative of the broader corporatization of the University, which Stump called problematic.
“He’s just a product of what’s been allowed to happen” at Brown, he said.
For some, the prominence of financiers in the Corporation is the underlying problem, particularly given potential conflicts of interest.
Former Herald opinions columnist Simon Liebling ’12, who was a vocal critic of former President Ruth Simmons’ membership on Goldman Sachs’ Board of Directors and compensation committee during the financial crisis, said the “noxious combination of secrecy and potential for malfeasance” stymies transparency and good practice.
National news outlets reported last week that SAC Capital was nearing a deal with federal prosecutors that would force it to offer a guilty plea of criminal misconduct and to end its management of outside investment funds. The negotiations have already taken a public toll, as the company announced this week that it was closing its London office, which employs roughly 50 workers.