In 2007, before the financial crisis and before federal prosecutors began listening to traders’ phone calls, the hedge fund SAC Capital Advisors was in aggressive expansion mode. And a charismatic young executive named Sol Kumin played an important role in its rise.
On Thursday, Mr. Kumin announced that he was leaving SAC, underscoring the firm’s transformation from one of the most powerful hedge funds on Wall Street to a symbol for corporate crime. Earlier this month, SAC pleaded guilty to a decade-long insider-trading scheme.
In a memo to his staff, Steven A. Cohen, the owner of SAC, paid tribute to Mr. Kumin, the firm’s chief operating officer and a key architect of its growth.
“The outside world tends to focus on me, but our success has been built by many people, one of whom is Sol,†Mr. Cohen wrote. “He has been responsible for transforming our business development and investor relations functions and has helped create our global strategy and footprint. Without his tireless work, we would not have had a strong London presence or our current business in Asia.â€
Mr. Cohen said that because SAC was morphing into a “family office†that manages just his and his employees’ money, “we will not need the same degree of business development activity or investor relations as before.†As part of its guilty plea, SAC agreed to pay a $1.2 billion penalty and no longer manage money for clients. The firm has been retrenching all year, shutting down its London office and reducing its headcount.
This left Mr. Kumin with little to do. A former lacrosse player at Johns Hopkins University who grew up in the Boston suburbs, Mr. Kumin landed at SAC in his late 20s after stints at Lazard Asset Management and Alliance Bernstein. He joined SAC when the firm was expanding. Until the middle of last decade, Mr. Cohen had run SAC like a small business. But about that time, the firm began to add new businesses and professionalize the firm, making it more appealing to large investors like pension and endowment funds.
Mr. Kumin found himself in the right place at the right time. As head of business development and later chief operating officer, he helped oversee the firm’s growth â€" and made tens of millions of dollars. At one point, SAC met with investment bankers and considered an initial public offering.
But over the last year, as the insider-trading investigation into SAC turned more serious, Mr. Kumin has instead played a leading role in managing the firm through its crisis. Last spring, as the government began preparing an indictment of SAC, Mr. Kumin was one of five senior executives, including Mr. Cohen, who received subpoenas to testify before a grand jury. He never testified but agreed to meet with prosecutors as part of their investigation, according to people briefed on the case.
“The last year has been unbelievably difficult for all of us, and although I am incredibly proud of how, together, we have come through this, I am looking forward to taking a break, to recharging my batteries and to figuring out what the next chapter of my life will look like,†Mr. Kumin said in an email to his colleagues. He will leave SAC at the end of January.
“I am moving back to Boston in June of 2014 and look forward to resuming life close to where I grew up,†he said. “Working at SAC Capital is a full-time, seven-day-a-week job and I can’t wait to spend more time with my family.â€
In his note, Mr. Cohen was unusually emotive in reflecting on Mr. Kumin’s role at the firm and his imminent departure.
“We owe Sol a great deal of thanks for his leadership here at SAC,†Mr. Cohen said. “It is never easy to part with a colleague with whom you have worked so closely, but it is even more difficult when that colleague is someone you consider a good friend. We know his talent, creativity and hard work will ensure Sol will succeed in whatever he chooses to do next. Please join me in wishing Sol well.â€
