Hudson Farm’s Hedge Fund Friend Gets $1.8 Billion in Fines from Fed

Hedge fund giant SAC Capital fined 1.8 billion dollars by federal prosecutors in largest ever insider trading fraud punishment

SAC Capital has agreed to pay a $900 million fine and forfeit another $900 million to the federal government

The deal follows a separate agreement to pay a $615 million penalty to settle an insider trading claim

One of the world's largest hedge funds, it was founded by billionaire Steven Cohen, 57

It will now have to terminate its investment advisory business

Peter Kellogg & Steve Cohen - The Start of a Long Friendship

Spear, Leeds & Kellogg, was the first firm that cleared SAC’s trades.  12 years ago Cohen struck out on his own to start a hedge fund, SAC Capital Advisors. To raise additional capital, he sought out Peter Kellogg, a legendary trader who ran Spear, Leeds & Kellogg, a major brokerage firm on the New York Stock Exchange floor. Steve Cohen’s discussed his start up plans for SAC with Peter Kellogg .and his firm invested $2 million in the fledgling SAC according to close sources. SAC went online with $25 million, approx. half of which was Cohen’s, and fewer than a dozen employees. A month later, Cohen returned Spear Leeds’s money, along with a fetching profit. Kellogg sold the trading firm Spear, Leeds & Kellogg to Goldman Sachs in 2000, for $6.5 billion.

Kellogg is the Controlling Shareholder of IAT Reinsurance Co.

 Kellogg formed Bermuda-based IAT Reinsurance in the mid-1990s. A decade later, the firm came under scrutiny for taking advantage of tax laws benefitting tax-exempt insurance companies. After the New York Times reported that IAT escaped $110.3 million in taxes over a three-year period, Congress closed the loophole. This year IAT Reinsurance Co. made news for suing the Internal Revenue Service for refunds of $186 million in taxes and interest they paid after the IRS revoked IAT’s tax-exemption retroactively.

 Kellogg continues to operate the company, and keeps a relatively low profile by using the colloquial property name of Hudson Farm for his business dealing in Sussex County that is reported in the local press and Municipal Meeting reports. However he is getting big attention from the top financial news media.  Kellogg and IAT claim IRS officials were “unduly prejudiced” against them by a “politically charged atmosphere”

Todays news about his friend Steven Cohen shows this politically charged atmosphere for investors has just gotten worse.  Let’s keep our fingers crossed for Sussex County’s and Hopatcong’s celebrity philanthropist and Hopatcong’s Borough Attorney John Ursin’s top private client.  

Properties IAT Reinsurance Co holds in Hopatcong

 – Is this Hudson Farm property? Yes it is

Peter Kellogg also operates Hudson Farm these are the IAT properties  

Block   Lot       QualClass        Location                       Owner