Has this hedge funder bought off the U.S. government?

Don’t be silly. Of course he has!

By allowing the firm to plead guilty—rather than the man who created it, owns it outright, and runs it with an iron fist—today’s agreement also perpetuates the myth, visible in other recent Wall Street cases, that abstract corporate entities rather than flesh-and-blood humans are responsible for financial wrongdoing. Which, of course, defies the laws of physics. SAC Capital Advisors exists only on paper. It was the people who ran the firm that defined its culture and designed its peculiar internal structure, in which portfolio managers and analysts were encouraged to share their best investment ideas with Cohen directly. While Cohen wasn’t named as a defendant in any of the SAC insider-trading cases, court papers have alleged that, as the firm’s owner and chief executive, he “enabled and promoted” the wrongdoings.

If this is so, why isn’t he in the dock facing criminal charges?

One possibility is that he hasn’t done anything wrong, and didn’t know anything about the insider dealing that was “substantial, pervasive and on a scale without known precedent in the hedge fund industry.” In a statement issued in July, his spokesman said, “Steve Cohen acted appropriately at all times.” Another possibility is that the investigators and prosecutors in Preet Bharara’s office still don’t have enough evidence to tie Cohen directly to particular instances of insider trading. One of the SAC employees who is currently awaiting trial, Mathew Martoma, who reportedly spoke personally with Cohen about his investments, has so far refused to coöperate with the government, according to numerous reports.

The S.E.C., despite settling with SAC in March, subsequently brought a civil case against Cohen, charging him with failing to supervise his employees and prevent insider dealing. Today’s agreement leaves that case outstanding, and it doesn’t preclude the possibility that the Justice Department could bring criminal charges against Cohen. According to a report on the Times’ DealBook blog, investigators are currently examining SAC’s trading in Gymboree, the children’s clothing and music chain, with the aid of a witness.

The agreement does appear to rule out the possibility that the Justice Department will indict SAC and Cohen on racketeering charges, which can carry penalties of decades in prison. Back in the nineteen-eighties, when Rudy Giuliani held Bharara’s job, he threatened the investment bank Drexel Burnham Lambert with racketeering charges, and brought them against Princeton/Newport Limited Partners, a small investment firm. According to reports earlier this year, the U.S. Attorney’s office was considering exercising the racketeering laws, which are a kind of nuclear option, in this case, too.

Evidently, that idea was dropped. Far from being treated like a mobster, Cohen was hit solely in the pocketbook. He wasn’t even mentioned in the U.S. Attorney’s press release about today’s settlement, or in a letter and legal stipulation about the settlement that Bharara’s office filed in U.S. District Court. Rather than naming names, the documents contain repeated references to dozens of corporate entities and investment funds connected to SAC—the “SAC Entity Defendants.”

From Cohen’s perspective, that’s got to be encouraging. He’s not quite in the clear yet. But with about seven billion dollars in his back pocket even after he’s paid off all his fines, he’ll be feeling better about things. Maybe he’ll even go out and buy himself another Picasso to celebrate.