Judge Throws Out Racketeering Claims Filed by Cohen’s Ex-Wife

A legal battle between the billionaire investor Steven A. Cohen and his ex-wife, Patricia, will continue for a while longer, but a federal judge considerably narrowed the scope of a civil lawsuit filed by the former Mrs. Cohen, who is seeking millions of dollars in damages.

In a court ruling on Monday, the judge, William H. Pauley III of United States District Court for the Southern District of New York, observed that the litigation between the former spouses was notable for the “seemingly inexhaustible legal resources each side has brought to bear.” The judge added that given the parties divorced in 1990 after 11 years of marriage, the current legal squabbling restores “faith in the old-fashioned idea that divorce is something that lasts forever.”

The judge granted a motion by Mr. Cohen dismissing a civil racketeering claim that would have enabled his ex-wife to collect treble damages. Judge Pauley said that he found no evidence Mr. Cohen had used his SAC Capital Advisors hedge fund to conceal a nearly three-decade-old settlement from her. The judge also rejected the notion that the federal government’s insider trading investigation of SAC and Mr. Cohen had anything to do with Mrs. Cohen’s civil claims filed under the Racketeer Influenced Corrupt Organizations, or RICO, statute.

“Patricia Cohen cannot take on the mantel of a private attorney general just because her ex-husband is a public figure and SAC is in prosecutors’ cross hairs,” the judge wrote. He continued, that allegations of RICO and a failed marriage “don’t go together like a horse and carriage.”

But Judge Pauley let stand claims that Mr. Cohen breached a fiduciary duty to his ex-wife and potentially defrauded the her out of her right to some of the proceeds of a nearly three-decade-old settlement.

“We are pleased that the court threw out Mrs. Cohen’s RICO claims,” said Jonathan Gasthalter, a spokesman for Mr. Cohen. “We will continue to defend against her equally specious fraud and breach of fiduciary duty claims.”

The lawsuit arises from a claim that Mr. Cohen concealed from his ex-wife that he had reached a $5.5 million settlement with a former business party during the time the couple was separated and preparing to divorce. Mr. Cohen’s ex-wife has said she didn’t learn of the settlement until 2006.

In 2009, she filed a civil racketeering lawsuit, claiming she was entitled to some of Mr. Cohen’s personal fortune because his firm was a “racketeering scheme” that engaged in insider trading and other crimes. She later amended her suit in 2010, removing accusations that SAC committed various crimes, but said that she was still entitled to $10 million, saying that the proceeds from that undisclosed settlement were used to helped start his SAC hedge fund in 1991. That lawsuit was dismissed, but an appellate court last year allowed Mrs. Cohen to refile her claims, including her civil RICO claim.

The legal battling with his ex-wife has taken a backseat to Mr. Cohen’s battles with federal prosecutors. In November, his hedge fund pleaded guilty to securities fraud charges and agreed to pay a $1.2 billion penalty.

And while prosecutors have not charged Mr. Cohen with any wrongdoing, federal authorities insist they are continuing their investigation.