SG Cowen Faces S.E.C. Accusations in Fraud Suit

SG Cowen is facing some serious trouble with the S.E.C. The Securities and Exchange Commission has accused the company of fraud in a recent lawsuit.

The suit alleges that SG Cowen misled investors about the risks of a mortgage-backed security in 2007. This is a big deal, as mortgage-backed securities were a major contributor to the financial crisis of 2008.

The S.E.C. claims that SG Cowen failed to disclose the true nature of the security, which was backed by subprime mortgages. This is a serious accusation, and it's not the first time a financial institution has faced similar charges.

The S.E.C. is seeking damages and other penalties in the lawsuit.

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At SG Cowen, the analysts are no longer stuck in a routine of producing generic reports. They're now focused on providing good investment ideas, and it's paying off.

The company has increased its coverage from 315 companies at the end of 2003 to 470 at the end of 2004, and is expecting to follow 600 companies by the end of this year. This is a significant jump, and it shows that the analysts are able to think outside the box and focus on what really matters.

SG Cowen has also introduced two new reports: the "Investment Controversy" series and the "Non-consensus Idea Series". These reports are designed to identify issues that are not widely accepted and to provide fresh perspectives on the market.

The analysts at SG Cowen are now using their time to look for good investment ideas, rather than just producing generic reports. This approach is paying off, and the company is seeing the results in its increased coverage and new reports.

Recruitment at SG Cowen is a highly selective process. The bank's hiring objectives are to staff the company with a manageable ratio of Associates to Managing Directors and to be selective enough to make the process enjoyable, self-sustaining, and enhance reputation.

New hires must be willing and able to work hard and learn quickly, as the average work week is 70-80 hours. This is not just a job, but a career that requires a strong work ethic.

The hiring process for Associates at Cowen follows a well-defined, time-tested structure. The firm's strong emphasis on collegiality and team orientation is viewed as critical to the firm's well-being and future.

The bank's 90 percent associate retention rate and average tenure of ten years speak to the success of its recruitment process. The right people are there for longstanding, challenging careers.

SG Cowen's recruitment is based on the idea that potential success transcends class rank as a predictor of achievement. A successful candidate will exhibit initiative, creativity, and the capacity for hard work and extreme loyalty.

The investment banking industry is extremely competitive, and SG Cowen's recruitment process must be efficient and effective to attract top talent. The bank recruits via on-campus 1st round interviews with students pursuing a Masters in Business.

The key challenges in recruiting top talent include efficient utilization of the super-day, interviewing and recruitment efforts, and investment banker's involvement in the recruiting process. Over 50 investment bankers were away from their jobs for a day, resulting in a direct loss of about 2,500 hours.

The selection process at SG Cowen is effective for a smaller sized company, using a resume-driven process that tests a candidate's determination, personality, and background. The CEO and department heads work closely to oversee the process, showing a personal investment in hiring the best people possible.

The Securities and Exchange Commission, or S.E.C., has accused a former official of fraud in a lawsuit against SG Cowen, a New York-based investment bank.

The former official, John Farley, was a managing director at SG Cowen from 2000 to 2003. He allegedly made false statements to investors about the financial condition of a company called Hexion Specialty Chemicals.

In 2007, Hexion Specialty Chemicals announced that it would not complete its acquisition of a rival company, Momentive Specialty Chemicals. This led to a big drop in the stock price of Hexion Specialty Chemicals.