Cohen was banned from managing outside money for two years by the Securities and Exchange Commission (SEC) after an insider trading probe in 2013 at his then-actively managed funds. Now, he's is investing as much as $250 million into Quantopian, a Boston-based startup fund founded by John Fawcett in 2011.
Additionally, Cohen's firm will also be giving Quantopian strategic advice for $2 million.
The hedge fund manager's investment is a major advance for the start-up company, which has just managed $5 million.
Currently Quantopian has over 85,000 member-users around the world, who've created some 400,000 investment algorithms. Its users include professors, scientists, software developers, students and finance workers looking for a start in investment management. The way Quantopian works is it studies the performance of its users' algorithms and allocates capital depending on their returns, or other variables like sharp ratios, style and capacity.
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