Investor embroiled in insider trading row loses £73m Metro slump hurts billionaire backers
A HEDGE fund billionaire once embroiled in an insider trading row has lost more than £73m from a share price slump at Metro Bank.
Steven Cohen, Metro’s largest shareholder with an 8.12pc stake, was banned from looking after investors’ money for two years in America following a criminal probe which saw several of his lieutenants jailed.
He is among a star-studded list of investors to lose out at Metro, including former New York mayor Michael Bloomberg, Boots owner Stefano Pessina and Roger Farah, the chairman of jeweller Tiffany’s.
Shares in the bank have crashed more than 42pc in the past fortnight after it unveiled an accounting mistake which meant the riskiness of some loans had been underestimated.
Cohen – who has an estimated fortune of £10.7bn – is £73.5m out of pocket due to the fall, according to ownership data from Reuters. The 62-year-old was embroiled in a corporate scandal after one of his senior staff, Mathew Martoma, was jailed for nine years for insider trading. Several other portfolio managers were also imprisoned, and Cohen’s fund SAC Capital pleaded guilty to insider trades although he was never personally charged. In the US, Cohen was banned from looking after anyone’s money apart from his own until 2018. And in the UK, the Financial Conduct Authority has twice refused to allow him to take investments from British savers.
Cohen has four children with second wife Alexandra and owns property around the world including a New York mansion on an 18-acre estate with a golf course and ice rink.
He is among a host of senior American business figures persuaded to back Metro by its founder and chairman Vernon Hill, who is himself sitting on a paper loss of £46.3m in the value of his 5.11pc holding.
Hill’s wife Shirley is also exposed after a pension fund for her architecture firm, Interarch, suffered a £650,000 hit to its stake of 0.07pc.
Metro has previously been criticised for paying branch design fees of £24m to Interarch, which is based in Hill’s native New Jersey.
Former New York City mayor and media mogul Bloomberg owns 2.71pc of Metro through his firm Willett Advisors, which looks after money he is using to support charities. The value of the 76-year-old’s Metro investment is down £24.5m.
Monaco resident Pessina, 77, owns 1.18pc of Metro and has lost £10.7m.
Tiffany’s chairman Farah, 67, owns a 0.7pc stake in the bank which is down £6.4m.
Metro shares have nearly halved since its float in 2016 following a series of setbacks. It is expected to tap up shareholders for another £300m after discovering the accounting error.
The lender’s woes were compounded when the Mail revealed this mistake had been discovered by regulators at the Bank of England, not an internal investigation as boss Craig Donaldson previously claimed.
Donaldson – who owns 0.25pc of the lender and lost £2.1m – is under pressure to quit. Shares rose 6pc, or 73p, to 1273p.
FRAUDSTERS have been able to intercept text messages sent by Metro to its customers.
Criminals took advantage of a weakness in telecom firms’ systems to target Metro and other banks. Metro said that a small number of customers were affected and none lost money.