back to childhood memories and they want their ice cream truck and they want it now. >> thanks so much. >> thank you. >> i'm getting some ice cream. >> you deserve it. the interns as well. thanks to them. "fast money" starts right now. have a safe weekend, everybody, and stay cool. >> i will right now, stay cool. definitely. markets in new york city's times square i'm melissa lee. traders are -- straight to the big story. fast is following tonight. steve cohen under fire. the sec announcing it has charged cohen for failing to supervise two senior employees and prevent insider trading. they're seeking to bar cohen from overseeing investor funds. let's bring in michael bowie. the partner.

you deposed cohen in 2011. what was that a part of? what sort of case was that? >> it was a part of a case by fairfax financial. alleged that acc had manipulated its securities. it was getting advanced knowledge of analyst market moving reports before they came out and traded on. >> given the timing of what the charges and what the charges are, failure to supervise as opposed to some of the other charges that could have been brought, how would you characterize the strength of the sec's hand? >> i read the complaint coming over here. i think the evidence is unbelievably damming. there are tactical reasons why the sec would have gone for the charges it did in administrative proceeding. when you look at the charges, you have here a slam dunk failure to supervise case. you have people who have material nonpublic information communicating that in two different stocks directly to

steven cohen. it's obvious from the nature of the information it has to be insider information. in fact his own internal people are saying this information is too good to be true. okay, now, his defense is gee, i didn't know. sort of a dummy defense. i didn't realize it might have been insider trading. i think the sec is saying we can just take you at your own word but if you didn't know to ask and didn't go through compliance and call someone to find out where this information came from, then you failed to supervise, so i think it's just taking low hanging fruit. i think it's the tip of the iceberg. i know there's a lot of speculation, does it mean anything about the prosecutors and doj, i don't, but any reasonable person who reads that complaint and the fact it was cohen telling -- to go talk to those insiders i think any reasonable person would conclude he obviously knew it was insider information, but it's just an easier case for the government

to prove because they already have them. it's not a case where he's removed by civil orders of compliance and they have to show he didn't tell people to do their job. he got it. >> for the layperson, is this the one and only charge or can they come back with something else? or is this the best they have? meaning the charges against mr. cohen? >> no i think they could come back. i think there's a lot of information on statute of limitations that's out there. there's a lot of confusion about that. if they have more information -- >> are there statutes of limitations? what would they be? >> well the one that's called all the time is five years from the date of this trade, but for the type of relief they're seeking where they're seeking equitable relief bar order or discouragement, there is no statute of limitations on that. then there are all sorts of other, the federal prosecutors have even more ways to get past five years under rico under conspiracy charge. another thing to remember in

this case, although the trades occurred at this point in time in july, martomo didn't get paid out until the end of the year so you could spread the statute of limitations out, but if they have other charges they want to bring, they can. >> this seems to be the s.e.c. more going after what they can, but does this set a precedence that the entire hedge fund industry starts to get worried about? you talked about your client. i've been that hedge fund that's been very concerned the markets aren't free. leave s.e.c. out of this. coming up with legislation or setting precedence in the market now that are going to change the way business is done tomorrow. >> i don't think that's the concern here because if this isn't a failure to supervise case s.e.c. put out a statement saying it has no merit, then there is no such thing as a failure to supervise case. you have the head of the firm who is one of the most prominent hedge fund managers in the world

and he has his own people providing this information to him that is at a minimum, suspicious and he chooses not to raise any questions about that and the same thing happened in the fairfax case. there, the e-mails showed it wasn't that he was removed and others were doing things. these e-mails went directly to him that indicated that they knew a research report was going to come out and he did nothing. >> what happened? >> there was an analyst calling morgan keagan and they were going to initiate coverage of fairfax with a report that said essentially it was $5 billion overstated. essentially insolvent for an nrns company, which was going to tank the stock. the analyst leaked it to s.e.c. and several other hedge funds. the e-mails, it was a leak to the cohen group. that's cohen's own trading group inside s.e.c. the e-mails went back and forth with cohen on them. their own internal compliance

manuals which i depose him about said you need to do three things. don't trade on it don't tell anyone about it and immediately tell compliance and legal. they did none of that. cohen was on those e-mails. didn't see a problem with it. didn't tell anyone not to trade on it and they did engage in trading during that period. >> so what happened? you said that the evidence is add damning in that case. what happened then? will that happen this time? >> i think what happened then was by the time we came up with that evidence in discovery and was publicized, that happened in 2003, but the fbi and s.e.c. did investigate that and that along with many other things have imparted what they've pursued up until now. for example, sac subpoenaed that deposition and it's hard to understand because he didn't know what was in his own

compliance manual. >> were you amazed that no one has agreed to cooperate yet? >> well there have been some people who have cooperated. >> in the current case. >> you know, r i think a lot of people are surprised about that. i think as the u.s. attorney said the other day, the kay day is still long and we'll see where that goes. >> thanks for coming by. let's hit some of the names moving on those headlines today because there are positions to be watched. major positions in terms of percentage of shares outstanding within these particular companies owned by sac capital. we went through the list and found names like log me in. tevo. stage stores as well. these are some stocks that have a little bit less vulolume. should you be concerned? >> i don't think so. i think you have to be real careful trying to make an

investment decision on this. say mr. cohen decides he's going to become a family office. it's mostly his money any way, so he doesn't necessarily have to sell these stocks. so in terms of investment wise i think there's probably better ways to make money in the market. >> and these things drag on for years. if there's a knee jerk reaction and you're an investor in one of these names, you're not compelled to have to make a decision on what you have to do today. >> it's a buying opportunity. >> we have a question. >> there are many reasons to trade, buy and sell stocks. i'm not convinced this is trying to game this one is -- game's hard enough as it is. >> i think the family office point is an excellent point. his reality may not change on this. he's barred from managing investment funds, but if 60% of the funds are your own -- >> i agree with that but to say that the existing structure would just be transported, downsized into a family office with the same structures and investments if they were just

his money is a big maybe. >> all right. let's switch gears and talk about the two big tech misses we're dealing with last night in the after hours session. was a tough day for microsoft and google. microsoft having its worst day since january 2009 and google as well, falling nearly 3 2%. for google, it was a much better story than what it had looked like. >> the stock briefly traded in the 860s. 850 started being a level clearly it did not get there, but you've seen this before many times, that initial selloff, couple of days of sideways activity. we sort of got it today. my sense is you'll probably see the fall next week. microsoft, a more interesting story. here's a stock that traded five times normal. it traded down to 31 but in least of terms of trader day,

you have a fine risk. >> would you add? >> yeah i don't think we should be lumping these two names together at all. had a good quarter. >> what don't we get about that quarter? because the stock did go down. >> pre 2008 it wasn't all about firing everyone. they used to invest in the future pay their employees well and innovate. google is taking a page out of the pre '08 playbook and if you deserve to sell the stock, you deserve to sell the stock. this is a company growing like 18% on adds. the only knock you could have on google is that they don't make as much for mobile ads, but the sheer volume of mobile ads coming on to join what they're already doing on desktop machines is so great it almost doesn't matter and if they have a hit with any of their other innovations, it's almost the cherry on top.

microsoft is a bomb. this quarter looks like it's the inflection point where people say you know what? their dominance is now questioned. >> i hear what you're saying. not impressive more cap ex. first of all, the margin was down, but a bomb for a company that's got enormous kind of annuity value of their windows business. >> tape doesn't lie. this is the hugest volume day since 2011. the tape doesn't lie. it didn't matter all year. they would say not so great things about their core business. people bought it any way. guess what? you bought this name for 3.5% dividend you just lost two in eight hours. >> i think josh makes a good point with the dividend there and we'll see this as we go on here. did you have bonds type investors in these names, you need to be worryied about that. i'm just saying trs a lot of people out there that have

bought high dividend in stoms that don't have the stomach for the volatility. >> i was a bear on the street for microsoft a couple of weeks ago and lost. there's nothing sexy here. this was a nine times valuable three months ago. very interesting. crowded trade. you don't run for the hills here, but this is a place to start sniffing. >> get to a name that has been working. netflix down just slightly. what would you do? buy or sell -- performing well into earnings then selling off. >> monday after the bell and i'm going to go out on a limb with this one. i think it would be easy i'm going to take a shot and continue to buy the stock, play it from the long side. realize the valuation is redick ridiculous, but the stock is trying to tell you something. i think the upside is there for

netflix. >> tim. >> i think this is a stock that ultimately i'm very pleased by the fact these guys have a content gain. they're up there for awards. the world is changing and these guys seem to have made adjustments. but again, i don't really understand this valuation. it's not a place where i feel like i need to hold this excuse me, buy this stock. i would not be shorting this stock. i would be a holder. >> i guess i'm a holder of this. this is a name i haven't understood because i'm not a netflix user. i'm starting to actually get it. that's probably the top. so if you're in it let's hold it and if it on a pullback i might look at buying it. it would have to be significant. >> flip a coin. >> all right. coming up next with the market still hovering near those highs, could there be signs that the top is near? josh gives us his take. we've done math some of the

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welcome back. we are watching reports that

barry sterling has submitted a bid for the company that owns sax fifth avenue. the titan has reportedly offered between 17 and 18 a share. the owner of lord and taylor. melissa, back to you. >> josh lipton what do you think? >> so listen. it could be true the stock reacted quite well so the way you trade this is you wait two or three days or at least until monday because if this is the deal, it's going to go right up to the deal price. if it starts to break the deal price, then you have the potential there might be multiple bidders, but until you see that it's kind of difficult to go plowing into it. >> good trade skills. today's top trades. industrials holding strong with earnings off general electric honey well. ge seeing its best days since 2011 but missed on revenues. >> the margin side is what people are looking for. they are shrinking ge capital.

the oil and gas sides, the luf kin purchase is starting to pay off. they have reaffirmed at least the margin and i believe they're going to see the growth. i would stay in this. ride this for an underperformer so far take this and go. >> next up, chipotle, shares rallying today, hit ingting a new 52-week high. >> this is a name that storted by many famous hedge fund managers. unfortunately, i think the miscalculation there was that the customer is not trading to a taco bell. i don't care if they put the rockets in front of the place. two distinct customer bases. they like the product, they'll keep coming back. >> the rockettes? this just came to you? >> it's friday. you know how many things i've had to come up with on the fly? >> excellent point. move on. >> lastly the bermuda based holding company that ensures u.s. government and debt is also the lead insurer on most of

detroit's bonds. >> everybody thought they would get hurt today, but when you look at how much they're insuring here it's probably about $300 million, payout on everything they insure. i think a lot of the street is saying today it's a buying opportunity on the weakness. you could probably stay in this but if we start to get some spillover effects, then watch out for these names. then you may want to short. >> time for pops and drops. a drop for sherwin williams. down 7%. >> the problem with a name like this, they've been so good for so long, the analysts have continued to raise estimates and at a certain point, it's just not doable. high quality name though. >> yahoo! up 7%. >> great week for yahoo! and melissa maier talking about the ipo. that's going to add valuation here. up 7%. i'd like to see it back around

28. if you can get it to bounce off that level, then it's a buy. >> fedex, the move for the week. >> rockettes, right? they got over their woes of the third quarter when they obliterated the stock and then the fourth said we're doing things better. i still think fedex goes higher. >> asp, down. >> tough week. yesterday, biggest drop in over a year for a stock that also has seen consumer spending rise and to their benefit. i'd stay with the stock. i would buy this weakness. >> and our last pop. a compilation of exactly what we've been doing this week on the desk here at "fast money." >> you're a trader, we're traders. this is "fast money" here. >> it sounds delicious. >> that giant panda. >> how do you know if the panda's pregnant? >> in just a moment we'll be

hearing from carl as he gets ready to take the stage. >> i think i could live in that -- to anybody that makes me a quarter of a billion, i like. i think i have a much better record than he has. >> do you have the zoom? >> i have two zooms. >> that's what we do here. >> that's what we do. ♪ what a good week. after the break, from mcdonald's to the japanese elections this sunday, a look at some of the biggest headlines to rule the tape. plus our viewers have everything on everything from the emerging markets. that's next.

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top trades for the next week. first up mcdonald's. sharing lagging. >> i think they'll disappoint. i think comps will be disappointed. maybe miss on the eps side. i think the stock has a chance to trade down to 97. >> next up sunday's japanese elections, will abe's ruling coalition take the upper house? >> i'm short nikkei and long yen. which is the opposite, so this would be short dxj. the reason why, if he wins, he's going to push through more which means possibly a tax increase. the last time japan had a tax increase was 1989.

marked the top of the real estate bubble. 1999 marked a ten-year recession. >> you're on the other side of the trade. >> get one over on that. let me explain something to you. >> quickly. >> really important. beginning in 2014 every japanese citizen's going to have the ability to put 50 grand u.s. dollars into a tax free fore ever investment account. >> you have a calendar? >> everyone understands what's happening here. >> oh, okay. i believe it's 2015. >> let's reconvene next week see what happens. let's get to some viewer tweets. guy. >> we've liked this name for a while. it's a volatile stock. i like it because we love management. i say you hold it. hain. >> tim, good calls in emerging markets etf so far, so what do you do now? >> i think you take a little -- emerging markets going higher.

we're near the bottom of a range. it's picking up momentum it has outperformed. wait until 38 get back in. >> and josh, how much time do you put into your hair before each show? >> layers and feathered. i put less and less time the shorter i cut it. >> tim? >> brazil adding to tsu. >> josh. >> google. >> sell australia. >> options action begins right after this. [ male announcer ] here at optionsxpress, our clients really seem to appreciate

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tonight, resurrection time for apple. >> it is my creation! >> the tech giant gets a crucial earnings period and brian sullivan has a way to double your money in just one month. plus what's carl doing with netflix? how you can get in on the streaming giant for a fraction of the cost. and talk about playing the odds. >> guys what's the first lesson in poker? >> never bet on the emotion at