Steve Cohen is a Wall Street legend. Born into a middle class family in an affluent Long Island town, he longed from an early age to be a star on Wall Street. He learned to play poker in high school, went off to Wharton, and in 1992 launched the hedge fund SAC Capital, which he proceeded to build into a $15 billion empire, almost entirely on the basis of his wizard-like stock trading. He cultivated an air of mystery, reclusiveness, and extreme excess, building a 35,000 square foot mansion in Greenwich, Connecticut, flying to work by helicopter, and amassing one of the largest private art collections in the world. On Wall Street, Cohen was revered as a genius: one of the greatest traders who ever lived.
That public image was shattered when SAC Capital became the target of a sprawling, seven-year criminal and SEC investigation, the largest in history, led by a determined group of FBI agents, prosecutors, and SEC investigators. Labeled by prosecutors as a “magnet for market cheaters” whose culture encouraged the relentless pursuit of “edge” —and even “black edge,” which is inside information—SAC Capital was ultimately indicted and pled guilty to charges of securities and wire fraud in connection with a large-scale insider trading scheme. Cohen’s company paid record criminal and civil fines of nearly $2 billion and Cohen was forced to stop managing other people’s money. But as Sheelah Kolhatkar shows, Cohen was never actually put out of business. He was allowed to keep trading his own $10 billion fortune, and will be free to start a new hedge fund in only a few months. Though his company and several of his employees were convicted or pled guilty to insider trading, Cohen himself walked away a free man.
Black Edge offers a revelatory look at the gray zone in which so much of Wall Street functions. It’s a riveting, true-life legal thriller that raises the urgent and troubling question: Are Wall Street titans like Cohen above the law?