Once the target of DOJ investigations, Point72 hedge fund manager now helping to shape Trump's DOJ : report

By LOUIS FLORES

The top, in-house lawyer providing legal counsel to hedge fund billionaire Steven A. Cohen is now reportedly advising President-elect Donald Trump on recommended appointments to the U.S. Department of Justice. The lawyer, Kevin O'Connor, is wielding his authority to provide advice on DOJ appointments as a member of the Trump transition team, the Bloomberg news service reported.

News that the top lawyer at the hedge fund management company owned by Mr. Cohen was now vetting DOJ appointments struck some as raw, given that Mr. Cohen's company was forced to pay $1.8 billion in fines in 2013 to settle civil and criminal investigations brought by the U.S. Securities and Exchange Commission and the DOJ, according to a summary report filed by the journalist Peter Henning for The New York Times. The investigations alleged that Mr. Cohen earned his large investment returns by exploiting inside information. Thornton McEnery of Dealbreaker, the news Web site that publishes analysis of the legal and financial industries with savage wit, took a very dim view of giving discretion over selecting DOJ officials to "the general counsel of a hedge fund run by a man whose name is synonymous with the dark side of finance and power."

"The fox guarding the henhouse"

The investigations of Mr. Cohen's hedge fund management company on behalf of the DOJ were led by U.S. Attorney Preet Bharara. The press office that provides support to U.S.Attorney Bharara declined two requests made by Progress Queens for comment about the possible regulatory capture of the DOJ by an influential Wall Street titan. Amongst the questions that U.S. Attorney Bharara's press office declined to answer was whether, given the past allegations and convictions of financial misconduct by Mr. Cohen's hedge fund management company, was President-elect Trump "putting the fox in charge of the henhouse." It is not known if Mr. Cohen is able to exert any influence of Mr. O'Connor's selections for the DOJ. A request for an interview that included two advance questions were not answered by Mr. Cohen's press office : Mark Herr, a spokesperson for Mr. Cohen's hedge fund management company, now known as Point72 Asset Management, declined to comment for this report.

Damian Lewis, left, reportedly portrays a hedge fund titan patterned after Steven A. Cohen, and Paul Giamatti portrays a Federal prosecutor patterned after U.S. Attorney Preet Bharara in the Showtime premium cable drama, "Billions." Credit/Showtime/Fair Use

Damian Lewis, left, reportedly portrays a hedge fund titan patterned after Steven A. Cohen, and Paul Giamatti portrays a Federal prosecutor patterned after U.S. Attorney Preet Bharara in the Showtime premium cable drama, "Billions." Credit/Showtime/Fair Use

Although President Barack Obama and then U.S. Attorney General Eric Holder reportedly forbade DOJ officials from prosecuting Wall Street for crimes that sparked or worsened the 2007-2008 global financial crisis, U.S. Attorney Bharara was allowed by the DOJ to prosecute Wall Street officials for insider trading, authority that U.S. Attorney Bharara used to investigate Mr. Cohen's hedge fund management company, then known as SAC Capital. During those Federal investigations, the office of U.S. Attorney Bharara reportedly racked up a record of 85 consecutive convictions for insider trading. Two traders at SAC Capital were convicted of insider trading, but Mr. Cohen, himself, was able to elude prosecution, Mr. Henning noted in his report for The New York Times. The tension between U.S. Attorney Bharara and Mr. Cohen was fictionalised on the Sunday night premium cable drama, "Billions."

In the past, influential Wall Street financial institutions have been able to exert enormous influence in the shaping of Presidential cabinets for new administrations moving into the White House. In an October 2008 e-mail recently published by the Government transparency Web site, WikiLeaks, it was revealed that Michael Froman, at the time a Citibank executive, had forwarded a list of recommended Cabinet appointments that Citibank wanted the administration to make if then Sen. Obama won the presidential election. A news report published by The New Republic noted that, "The cabinet list ended up being almost entirely on the money," further noting, for example, that, Mr. Holder, Citibank's pick for U.S. Attorney General, would end up being selected for that post.