The Wall Street Journal has what it says are details of "a tense meeting in Washington" on May 10 between representatives of SAC Capital Advisors LP and aides to Senator Grassley, who is investigating "suspicious trading" by Steven A. Cohen's hedge fund. The Journal cites anonymous sources "familiar with the meeting" in saying that the SAC representatives "suggested...that investigators should go easy on the firm and Mr. Cohen in their investigation...The people said that an SAC managing director, Michael C. Sullivan, a former staffer for ex-Sen. John Ensign, also cited Mr. Cohen's civic-minded interest in considering purchasing a stake in the New York Mets."
If this is true, it's really something, on several levels. First, there's the idea that Mr. Cohen should get civic-mindedness credit not for actually purchasing a stake in the Mets, which he hasn't actually done, but for simply considering purchasing a stake in the Mets.
Second, even if he did actually purchase a stake in the Mets rather than merely consider doing so, how is it civic-minded? If the value of the interest appreciates or if it generates income or dividends, the gains would belong to Mr. Cohen, not to the city. What the Mets' current owners are reportedly selling is a minority interest with no management rights. That would have the effect of keeping the current management, which invested with Bernard Madoff and which has produced mediocre results on the baseball field, in place. One could make an argument that it would be more civic-minded for Mr. Cohen to refuse to invest in the Mets on those terms, and thereby to contribute to forcing the Mets owners to sell control to an ownership group that might field a better team.
Third, if Congress has a legitimate interest in investigating the integrity of the financial markets so that it can, if needed, adjust the laws or the spending on enforcement, then wouldn't you want the investigation to be conducted regardless of whether any particular individual market participant does or doesn't own a baseball team? I mean, if owning a baseball team — or, better yet, considering owning one — is going to be a free pass or special treatment card for suspicious traders, then Raj Rajaratnam ought to direct his defense lawyers immediately to open negotiations with the Mets and leak the news quickly before his sentencing, so he can get credit for civic-mindedness.
Finally, if the Mets ownership stake, or the consideration of one, comes with relaxed regulatory scrutiny as a side benefit, it raises the question of whether Mr. Cohen, in considering purchasing the stake, is being civic-minded at all, or whether he's just estimating the value of the relaxed regulatory scrutiny he imagines would or should come with the purchase.
