Tuesday, October 9, 2012

Lawmaker Denies Sending Suggestive Photo but Doesn’t Rule Out It’s of Him

“This was essentially a hacked account that had a gag photo sent out on it,” Mr. Weiner, a Democrat, said during an interview in his office here. “I can’t say with certainty very much about where the photograph came from.”

On Tuesday, Mr. Weiner presided over two testy news briefings at which he had dodged a variety of questions. On Wednesday, he adopted a strikingly different approach, sitting patiently for a series of interviews at which he insisted he had done nothing wrong and marveled at what he said on MSNBC was the “Alice in Wonderland world” in which a wayward Twitter message had become the talk of the town.

Mr. Weiner, one of Congress’s most enthusiastic users of social media to engage with constituents and supporters, said he believed his Twitter account, or a related photo-sharing site, had been infiltrated by a hacker or a prankster, who had then sent the offending photo out late Friday.

He said that he had hired an Internet security company and a lawyer to look into the matter, but that he did not believe the episode merited investigation by federal law enforcement. He did not rule out the possibility that the photo was of him, but said he did not know who could have sent it.

He said he did not know the woman who received the photo, Gennette Cordova, a student at Whatcom Community College in Bellingham, Wash.; she followed him on Twitter. He said he regretted that Ms. Cordova was caught in the middle of the controversy. She issued a statement over the weekend saying she had never met him, and she has not spoken out since.

“I just feel terrible for her,” Mr. Weiner said, adding that he had never corresponded with her. “She has committed no crime except to follow me on Twitter.”

The congressman also expressed concern about the toll the episode was taking on his wife, Huma Abedin, a longtime aide to Secretary of State Hillary Rodham Clinton. “I’m protecting my wife, who every day is waking up to these insane stories that are getting so far from reality,” he told CNN. “You know, we’ve been married less than a year.”

Asked on CNN whether he still wished to be mayor, he said, “Put it this way: It’s the only better job than the one I have.”

Jack Levin, the chief executive of yFrog, the Twitter-affiliated image and video service that was used to upload the photo, said in an interview on Wednesday that his company did not have reason to believe that its user passwords were exposed or stolen. He said it was possible that the photo could have been sent from Mr. Weiner’s yFrog account through his Twitter password or through a yFrog password.

Mr. Levin said neither Mr. Weiner’s office nor any law enforcement authorities had contacted him or his company to inquire about the photo.

Twitter, which does not comment on individual user accounts for privacy reasons, has declined to say whether Mr. Weiner’s account was hacked.

Despite the swirl of events that has buffeted him for several days, Mr. Weiner has not abandoned his sharp humor. Suggesting that the photo might have been altered, he alluded to a “Daily Show” sketch on Tuesday in which the comedian Jon Stewart, a longtime friend, had joked that the photo could not have been of the congressman.

“I don’t have memory of this photograph,” Mr. Weiner said in the interview in his office. “But I also ... you know, Jon Stewart might have had it right last night: that there were elements of this photograph that might have been doctored.”

He paused, then added: “But I don’t know that. And I don’t want that to be the headline.”

Ashley Parker and Jennifer Preston contributed reporting from New York.


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Sunday, September 23, 2012

DealBook: SAC Capital Said to Face Insider Trading Inquiry

Steven A. Cohen, the head of SAC Capital Advisors.Steve Marcus/ReutersSteven A. Cohen’s firm, SAC Capital Advisors, is under scrutiny.

The Securities and Exchange Commission is investigating whether trades in health care stocks by the hedge fund SAC Capital Advisors as recently as last year were made using inside information, a person briefed on the matter said Wednesday.

The investigation comes as SAC, one of the most prominent hedge funds in the world with $12 billion in assets under management, has become something of a focal point for authorities. Two former SAC portfolio managers have pleaded guilty to criminal charges of using inside information to trade technology stocks.

And Senator Charles E. Grassley, Republican of Iowa, has questioned how the S.E.C. handled referrals from Wall Street’s self-regulator, the Financial Industry Regulatory Authority, regarding 20 stock trades by SAC.

But the S.E.C.’s investigation into trading by SAC appears to be much broader. In addition to the inquiry into trading in health care stocks — trades that took place from at least 2007 through 2010 — the agency is examining SAC’s use of expert network firms, companies that connect Wall Street investors with outside experts in various industries, the person briefed on the matter said.

Separately, the S.E.C. is looking into whether the hedge fund used inside information about the 2007 takeover of MedImmune, a biotechnology company, the person said. The Wall Street Journal earlier reported about the inquiry into MedImmune.

A spokesman for the S.E.C. declined to comment.

Neither SAC nor its billionaire founder, Steven A. Cohen, has been accused of wrongdoing by the S.E.C. or by any other authority. A spokesman for SAC declined to comment on Thursday.

The inquiries into the SAC trades are part of an accelerating effort by the S.E.C. and the United States attorney’s office in Manhattan to crack down on insider trading, with a particular focus on hedge funds. The criminal investigations by federal prosecutors have resulted in charges against 49 people, 39 of whom have pleaded guilty.

Two people who have pleaded guilty were the former SAC employees Noah Freeman and Donald Longueuil. Mr. Freeman is expected to testify Thursday at the trial of Winifred Jiau, a consultant for an expert network firm who is charged with leaking inside information. SAC has said that it is “outraged” by the conduct of the two former employees.

The cases against Mr. Freeman and Mr. Longueuil are part of the government’s examination of expert network firms, which developed over the last decade alongside the proliferation of hedge funds. The government has filed criminal charges against 13 people connected to the firms, eight of whom have pleaded guilty.

The former SAC employees admitted to obtaining inside information about public companies and then using it to make profitable trades. The charges against the men detailed a cover-up straight from a television drama that involved destroying a hard drive with pliers and spreading the parts throughout the city.

Others with past ties to SAC have also been ensnared in the insider trading investigation. Earlier this year, Federal Bureau of Investigation agents raided two hedge funds founded by former SAC executives, Level Global Investors and Diamondback Capital Management. In 2009, Richard Choo-Beng Lee pleaded guilty to insider trading related to activity after he left SAC.

The S.E.C. has faced criticism that it failed to bring significant cases against prominent hedge funds as well as cases stemming from the financial crisis.

In April, Senator Grassley asked the Financial Industry Regulatory Authority in a letter to provide information on the “potential scope of suspicious trading activity” at SAC.

Last month, he followed up with a letter to the S.E.C. requesting to know how it handled past referrals about SAC’s trading activity.

MedImmune is not among those trades referred by Finra, according to people briefed on the matter.

SAC executives including Peter Nussbaum, the firm’s general counsel, and its outside lawyers met with staff members in Mr. Grassley’s office to discuss his inquiry.

Additionally, federal prosecutors are examining trades in an account overseen by Mr. Cohen.

Court filings related to the cases of the two former SAC portfolio managers who have pleaded guilty to insider trading, indicate that the government is reviewing trades made in Mr. Cohen’s account at the suggestion of the former employees.


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