DQ 5.2:Steven A. Cohen founded S.A.C. Capital Advisors LLP, one of the most well-known hedge funds in the world. S.A.C. managed a portfolio comprised of over $15 billion in assets. As detailed in your readings for this week, a 2013 SEC investigation revealed wrongdoing by S.A.C. employees. What types of activities had the employees engaged in that violated federal securities laws? Should a resourceful and reasonably well-established compliance department have been able to identify the gaps in S.A.C.'s compliance policies that enabled the senior executives to engage in the prohibited activities? Some commentators argued that one reason for the delay in identifying the violations at S.A.C., as well as in other similar cases, was that regulators had become complacent because the company was known to have a "state of the art" compliance program. Do you agree that regulators might relax their efforts if the firm has a strong reputation for compliance?If so, what measures might be put in place to minimize this danger?