Steven Cohen: Bending rules, making billions · Sheelah Kolhatkar

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there what's good team thanks very much for plugging into episode 135 now featuring on this episode is Sheila Cole Hartke Sheila is a writer at The New Yorker who was previously a journalist at Bloomberg Businessweek and prior to that a hedge fund analyst but the reason I asked Sheila to come on the podcast is because she's also the author of The New York Times bestseller titled black edge which has the tagline inside information dirty money and the quest to bring down the most wanted man on Wall Street of course the most wanted man being referred to is hedge fund legend Stephen Cohen of s AC Capital Advisors someone who Sheila has become very familiar with through much of her own strenuous and tireless research so from this conversation I had with Sheila you'll learn about where Stephen started out in life and how he became an ultra wealthy multi billionaire with an elaborate art collection my triad how s AC became the target of one of history's greatest insider trading investigations and ultimately how it all played out I do hope you'll find this episode interesting and if you'd like more on the subject you can grab a copy of Sheila's book black edge by going to chat with traders comm slash black edge that will redirect you straight to black edge on Amazon with that being said I'm your host Aaron Fifield and coming to you from New York City here is Sheila cohort car it took me a little bit about your background prior to doing this book you used to be a hedge fund analyst correct I was yes I was a risk arbitrage analyst for five years at two small small hedge funds I was not terribly happy doing that but it was it was a very interesting you know sort of stretch of my career but I kind of fell into a by accident and but that did teach me about hedge funds I mean I came to completely understand that industry through my jobs trying to just research arbitrage opportunities for these two small funds and that way I mean it was fascinating it's sort of an anthropological experience so why are you not particularly happy doing that role well I think that I am just temperamental II not well-suited to the kind of quick decision-making that you really have to do when you're a hedge fund trader and analyst especially doing the kind of investing that we were doing often sort of something would get announced or some piece of news would come out and you'd have to make a trading decision or pretty quickly and I'm the kind of person who likes to study and read books talk to people before I make a big decision yeah I am NOT good at just sort of doing a quick scan of the market and then going with my gut and just going for it it's just not at all my personality so and I just found it extremely stressful because you're investing with other people's money or investors money and if you lose your investors money that's a terrible thing and I just didn't like the responsibility of that sure I can understand that yeah yeah but I mean obviously some people enjoy that and they enjoy the risk-taking and they find it thrilling but they did not thrill me it made me very anxious so you worked at these two hedge funds as an analyst for a little while I mean what happened between there and you actually writing this book which we're going to spend a lot of time talking about black edge what actually happened in between and what actually inspired you to write this well if you fast forward a few years so I left the hedge fund world and I went into journalism and ended up in 2012 and 2013 working at Bloomberg Businessweek which is a weekly business magazine owned by Bloomberg and that was a very fun interesting job and you know the government had started investigating this big insider trading rate and they were making a rest you know periodically and it would it would be in the news and the Wall Street Journal and CNBC would kind of cover it but then at the end of 2012 there was sort of a break in the case and some FBI agents went down to Florida and they arrested a former portfolio manager named Matthew Mark Toma who had worked for Steve Cohen and that was kind of a big deal because Steve Cohen's had fun SEC capital is one of the biggest most well known hedge funds in the world he was someone who is really widely I don't know if admired is quite the right word but there was a lot of envy of his success on Wall Street he was just a famous well-known very wealthy investor so when the government went and arrested this former employee of his that you know they filed papers indicted this employee accusing him of insider trading and it was really clear from the government's filing and what they disclosed about the case that they were kind of interested in Steve Cohen himself actually my editor Businessweek said to me Sheila this is going to be a really big story and an interesting dramatic story you should kind of get on this right now it's perfect for you is what a hedge funds a lot of drama controversy with all the things that I like and you know I was reluctant at first because it seemed really hard and like it'd be really difficult to kind of find anything out and to get inside it but I started to follow the story they just got more and more interesting I thought well that's one of the things I was going to ask you is that you know doing this it must have been a really huge task to do all the research to actually be able to put this book together I imagine that there would have been a lot of people who probably didn't really want to speak to you about this particular case am i right yes that's absolutely correct so who were some of the people you were able to interview for the book well I have a sort of disclaimer in the book where I describe my reporting process and most of the people I spoke to I agreed not to identify them as sources in the book a lot of nonfiction books are kind of written this way because otherwise it's true people are nervous about talking to you while the case was still going on I went around to everyone on all sides of this hedge fund side the legal side the government's I denied I explained to people I'm doing this book this is a long-term commitment this is going to be a sort of an historical record of a really important series of cases that you are involved in you know we want to get it right and we'd be fact-checking the book I wrote letters to people I begged people I knew for introductions it's very painstaking process you know it's the painstaking process and takes a lot of time and you run into a lot of dead ends but over time as I continue to work on it people did start to agree to talk to me on this basis that I would not sort of reveal how I knew certain things I would be using the information I got from people to kind of construct a narrative of what had happened and there was also an enormous court docket about this case and there were deposition transcripts and trial transcripts and FBI notes I mean just voluminous filings from the government that really allowed you to you know fill in a large part of the story but then yes it was it was conversations and interviews with people and those were those took a lot of work I mean I had to build trust with people and show them that I was really serious and that I wanted to tell the real story and not you know not make mistakes and that this would be the account the final account of what happened and yes it's hard work but but worthwhile fruitful of course yeah and correct me if I'm wrong here but you actually met Steve Cohen one time can you tell me how that played out yes well I had been trying to I knew it was very unlikely that he would agree to do an interview with me I mean he was under a tremendous amount of legal pressure there was a possibility during most of the time I was working on this book that he might be charged or go to jail possibly I mean I'm sure he was very nervous and there's no way his lawyers would have allowed him to sit down with his author you know speak openly about what had happened but even though he he had been sort of saying no we're just avoiding me I felt that I had to kind of make a final pitch to him in person about the book and just sort of hear it directly from him that he didn't want to participate so I knew that he was going to be at an art auction at Christie's auction house in Manhattan on a particular night it was a very high-profile auction sort of one of the one of the kind of big social events of the art world and he's a big major art collector he has one of the most well-known private our collections in the world it's valued at over a billion dollars so he it was known that he was going to be selling a painting at this particular auction so I knew he would come so I just waited for him in the lobby of Christie's auction house there and I had my business card and like a little notepad and I saw him coming and I just sort of jumped right into his top and I introduced myself and he soon as he heard my name yet he knew who I was he said Oh God you know I can't talk to you you know I said well I said well listen you have a really good story to tell I want to hear your side and I want to hear about how you're changing your firm and trying to you know improve the culture of the company and he said I'll think about it and then he sort of trying to get away from me as quickly as possible and then I said well are you going to be buying art tonight or selling and he said oh selling himself and I knew that he was selling this one piece and then he kind of disappeared into the crowd and then literally you know 30 or 40 minutes later he bought a Giacometti sculpture for 141 million dollars I think it was so I just loved that then my bike one face-to-face interaction with him involved in telling me he was there to sell but he was back there to buy and I thought that was just sort of perfect yeah I mean not to mention he brought a hundred and forty-one million dollar sculpture I mean that's that's pretty badass yeah oh yeah he wasn't messing around yeah well okay so many people probably at least heard of Steve : mostly probably for the wrong reasons but many what many people probably don't know is that Steve was actually a really good trader in his early days he was it was almost like a gun trader from the outset I mean what sort of background did Steve have before had she got into trading and then we'll talk a little bit about in his early days but I mean what sort of background did Steve Cohen come from I mean these days is worth upwards of ten billion dollars or whatever it may be I mean did he come from a wealthy beginning I mean what was his childhood and upbringing like he came from a very very middle-class family he grew up in Great Neck Long Island which at the time was a fairly affluent kind of commuter town outside of New York City and there was a lot of wealth there at the time and his there were eight kids in his family and they were not wealthy I mean they were very middle-class money was a little bit tight at time and I think Steve Cohen wanted to be rich from an early age that was just a goal he had from almost from childhood and his brothers told me a funny story which is included in the book about how everyone in the family sort of felt that Steve would be you know was special their mother his brother remembered their mother cooking steak for little Steve and making hot dogs for all the other children and I just thought that was very funny as sort of a memory that his brother had now I find it hard to believe that any mother would treat her children so differently but who knows but just the fact that Steve comes brother remembered this happening was really telling I mean there was a real sense that Steve was special he's really smart he's going to make a lot of money and so he's treated he was treated a little differently he started playing poker in high school and then he went to the Wharton School at the University of Pennsylvania which is a very famous Business School and that's where a lot of Wall Street Titans go to college and he went there and he finished a semester early and immediately rushed to get a job as a trader at a small brokerage firm and that was that was his goal to get on to Wall Street as quickly as possible okay so can you tell us a little bit more about his his trading in those early days like how did he perform what sort of strategies he was trading where he worked you know how he performed yes yes so he his first job was at a small not terribly well respected brokerage firm it was called gruntal and company and it was located and right close to the actual Wall Street in lower Manhattan you know it was the place where there were a lot of misfits it wasn't sort of a slick establishment corporate environment it was it was a little bit wild and a lot of what was going on there consisted of brokers calling kind of individual investors trying to sell them sell them on different stock investments but Steve was hired by a family friend who was also from Great Neck who had started an options arbitrage desk at gruntal so this was 1978 and the options market was very new and there weren't very many people trading options I think a lot of people probably had no clue what they even were not nothing was electronic or digital so for people who did take the time to figure out the options market there was actually a lot of opportunity to make money because it was sort of what you what they might say was a relatively illiquid market you just didn't have a lot of competition in doing options trade and so Ron who was the boss at gruntal had devised an option strategy where you could you would either buy and sell options on different exchanges different markets or you would buy or sell options and buy or sell the underlying stock and basically lock in a spread based on the price differential between the two and it was just sort of a simple mathematical calculation you can just do it on a spreadsheet and it was a no-risk trade and most of the trades would be closed out at the end of the day but you know if they did this in high volume they could over you know the course of many days and weeks accumulate all these tiny little spreads of 25 cents or whatever was they're making on interview you know over time that would accumulate into a decent profit and considering there was all it was almost like a no risk strategy this is a remarkable thing it was like free money and so Steve joined this very small group of mostly guys from Long Island who ron had assembled there to do this and right from the very first few days he was there he he kind of said listen I want to just be trading and I want to do this option stuff and gradually his bosses gave him more opportunities to just trade the market almost like a day trader would do now and he was incredibly good at this he developed a reputation as a tape reader you know someone who can look at the physical ticker tape which is what they had back then when trades were consummated you would see not a physical ticker tape running through the office he could kind of look at the trades coming in and out of the market and just somehow be able to tell which way a stock price was going to move and and he started kind of day trading this way and he was also very good at determining how pieces of news would affect stock prices and he was very good at managing risk he didn't get emotionally attached to his trades he was very good about sort of pulling the plug and selling something if it just started to go against you and you know the kinds of situations where a lot of people will end up just losing more and more money because they don't want to acknowledge that they made a mistake he what he was according to everyone who worked with him at the time he was very good at just being dispassionate and analyzing risk and was very cool detached way and he just started to make you know a lot of money millions of dollars very quickly he did this for several years and it was interesting because a lot of his early period and the financial industry took place during the nineteen eighty sort of stock market boom when there was a lot of mergers merger and acquisition activity there's a lot of trading going on based on rumors of mergers and takeovers or a lot of kind of corporate raiders going after companies and building up stakes and companies and then trying to sell the stakes leveraged buyouts all these things were going on at the time so the market was just kind of shooting up and stock prices were going up and down based on all these rumors and this is the environment that he was in immersed in when he really learned learn the trade as they say so at what point did he branch out onto his own to start as I say well he had had a goal for a number of years to have his own fund because he did eventually as he became more and more profitable he started to feel a bit resentful that he had to share his profits with gruntal because gruntal was providing all his kind of his overhead and his office base and his back office services and all that so he said oh I don't want to I don't want to share with them they're not they don't deserve it you know I want to go out on my own I want to be my own fund manager in 1992 he cobbled together 24 to 25 million dollars of his own money and also of his his sort of core group of traders who were going to be starting to fund with him and just friends and family and they started SEC Capital whose hedge fund you know when it began obviously it was just a tiny one-room operation they had an office in Manhattan where they were all sitting in the same room and they would all kind of day trade together Steve would often kind of set the the trading plan for the day and all his traders who were sitting around and would just follow along whatever he was doing again the market was less mature than it is now and it was easier to make money doing this and hedge funds just generally were were newer type of investment vehicle there weren't so many hedge funds there was a lot less competition for the good trades and the good ideas but eventually you know as si si grew and he made more and more money his reputation really grew on Wall Street and people started to really watch what he was doing because he was known to be somebody who was always on the right side of a trade traders I spoke with all had stories of hearing you know about how a company with announced disappointing earnings and the stock would get killed and oh it turned out Steve was short right before that earnings announcement you know there were constantly things like just going on where it seemed like he somehow got in at the right time before some event news events moved to stock price and so people started to try and copy him and I think this was really frustrating to him because obviously when everyone else is trying to do this you know imitate your trades that sort of makes it impossible for you to do the trades although all the profit you were hoping just scooped up for yourself gets consumed by the all these other people imitating you so you know he became very secretive and spent a lot of time trying to trying to prevent the rest of the Wall Street community from imitating what he was doing and but but very quickly his fund grew to over a billion dollars just for a little context can you tell us a bit about the performance of si si like how well did the fund actually perform it performed extremely well almost from the get-go I mean in the early years the returns were higher than they tended to be later when the fund became so huge I mean at its peak it had over 15 billion dollars in assets under management so that's a very large fun and it's hard to post you know kind of double-digit returns and you're managing that much money but when he was small yes he was he was posting 50 60 70 percent return easily every year and it over time as people learned about this investors would fight to get in and eventually he started charging you know he started charging higher fees and most other hedge funds instead of taking 20 percent of the profits he would take 50 percent but investors didn't mind paying because the returns were so good you just couldn't find those returns anywhere else and it was very consistent I think in its entire lifetime as say C capital had only one year where it lost money and that was 2008 which was the year of the big financial crisis and I mean everyone lost money by year but he it was really remarkable every single other year the funds posted positive performance I mean statistically I think that is really difficult I mean people eventually started to become a bit suspicious about it because the chances that you can do that so consistently beat the market are very very fun yeah well let's let's speak about that okay so the fund si si became infamous for insider trading and using insider information was it always the case from the gap that it became known for diet you mean yeah I mean whether using inside information from the out sir what was it something that they began seeking out you know a few years into this venture well it depends on who you ask some some people believe there was possibly illegal activity going on there from early on there are others who believe it really became more of a problem in the later years when the fund got so big and started kind of expanding into other strategy that were more vulnerable to that type of thing I mean one thing I do admire about Steve Cohen is just was his ability to you know he was a businessman he was an entrepreneur he was managing SEC as a business and he was very good at anticipating changes in the hedge fund world and sort of adjusting what he was doing and changing SEC capital strategy to respond and to try and keep out a bit ahead of what what the market was doing and at one point in the early 2000 he made the decision to become a much more research intensive shop and he did not want to rely on outside sources to get good research information about his stocks and you know to that point they had been speaking to a lot of analysts big banks and he said no I won't have my own in-house team of analysts who are gonna analyze all our investments and especially they started to make more investments in sort of biotech and technology stocks it's very hard to understand all these industries so he went on a real hiring spree trying to hire very aggressive ambitious well educated well pedigreed traders and analysts who could really understand and research and become experts in these different industries and these different stocks they were trading during that period when the firm was sort of switching directions a little bit to move in this more research intensive direction I do think a lot of the people who got into trouble legally a lot of them joined during this era although not all of them but there was definitely an influx of new people who started to go you know who started to really look for and in tech stocks in particular and that led them into some activities that they weren't supposed to be involved in so certainly the documented problems you know tended to happen later but there are people who had suspicions going all the way back okay so he hired a whole bunch of analysts I mean how were they getting their information well so they all had they all had their different strategies but just to give you a couple of examples there was one portfolio manager in particular he hired a Mathew martoma he's the one who was arrested in 2012 who kind of piqued my interest in the story who I mentioned earlier so Mar Thoma arrived ivy-league-educated smart guy who was a sort of a biotech and pharmaceutical stock expert and he'd been at another hedge plant in Boston so he took a job at SEC Capital and he was a very determined aggressive ambitious fellow and he decided that he he was going to pursue an investment in some drug companies which were developing a new Alzheimer's drug and he knew a lot about Alzheimer's he knew a lot about the human brain and how these different drugs were supposed to try and address Alzheimer's disease there's no cure for Alzheimer's so for the right company that figures out a treatment for this disease there's obviously a lot of commercial potential there's a lot of money to be made so a lot of investors were tracking various Alzheimer's drug trials and trying to make investments so they could they could benefit if the drugs worked out so Mathew martoma Steve Cohen new hire immediately started trying to learn everything he possibly could about these drug companies and about this particular drug in about Alzheimer's and and the whole drug testing process Mar Thoma used an expert networking firm to try and help connect them to sources who would know about these these drug stocks now expert networking firms are are sort of hard to do they just this is the type of business that had popped up to cater to hedge fund and you would basically pay a fee to this this company and it would help connect a hedge fund investor to employees or experts in a particular company or industry who could give educate the hedge fund investor about about the the new company or industry so Mar Thoma used one of these to help connect him to a doctor who is helping to run the drug trial this is all laid out in the government's case against Marton but according to the government Mar Thoma immediately started pressuring the doctor to disclose secret information about the drug trial and the doctor was not supposed to discuss that type of information with him he was only supposed to talk about publicly available information however over time according to the government Mar Thoma sort of corrupted this doctor and ended up getting access to the drug trial results a week before they were announced publicly and this is the basis of the largest of all the insider trading cases involving SEC capital and Mathew martoma was alleged to have so paid money to this doctor gotten this information that sold off almost a billion dollars worth of these two drug stock and then in in in a collaboration with Steve Cohen shorted the stock and then a week later the trial results came out and a stock plummeted and SEC capital was alleged to have made profits and avoided losses of 276 million dollars so the largest insider trading case ever filed here so the incentive for the doctor in this case he was obviously being paid to supply the information I mean that was the only incentive for him that was one incentive but I think honestly the doctor developed affection for formar Thoma this kind of handsome young trader I think they almost became friends and eventually you know eventually he he wanted to help Mar Thoma out and he made a mistake and he ended up cooperating with the government to testify against Mar Thoma and I think he really regretted it it cost him his career he could have gone to jail he didn't but I think he became personally kind of wrapped up with Mar Thoma as their relationship became more friendly and but the reasons why you did it okay it's hard to believe because he really gave up a lot it was a really terrible error was made sure so were they paying what else I see pay for all their sources of information or was there I mean why would people give them information obviously we've talked about this case but just I guess speaking more broadly why were people offering information to si si like what was in it for them well that's a good question there are all different examples that have come up I mean in some cases according to some of these the cases the government filed there were hedge fund analysts at different hedge funds who were each getting information through various means often it was through friends people they'd known from college a friend of a friend who worked at Intel or Dell or Nvidia you know some company that makes microchips for computers you know the government had exposed one ring of hedge fund analyst at a whole bunch of different funds who were getting information that's sharing it with each other so there was some trading going on of information sometimes people were friends and wanted to help their friend out a lot of people were paid for the information you know a lot of people said I'll give you information if you if you kick me some of the profit you make back there were all sorts of complicated reasons but it was really a corruption people people became corrupted and I think a big part of the reason is because of the money there was so much money to be made and there wasn't a lot of policing going on as this of this industry right now when they were doing this and when they were taking on this information were they knowingly breaking the law at the time or was this bit of a gray area there is definitely some gray area in insider trading law and I mean my sense from the cases that I was able to study there are signs that the people involved did know that what they were doing was wrong I mean they would not try and hide it for example but many of them did argue that they didn't know for sure that the line wasn't entirely clear and it's true that insider trading is little complicated to prove and you have to prove that not only that the person who traded the information you know that they knew the person who trade information has to have known that it was leased by somebody who was not supposed to be leaking it this is you know usually the company Insider has a duty to keep that information confidential so they have to leak it out and then the person who gives up the information also needs to receive some kind of benefit for it they can't just sort of share it for as a gift they need to receive something in return either either you know money or maybe another piece of inside information if they're trading information but you have to kind of prove all these elements to really make a case in court that somebody knew so a lot of people were able to avoid charges by saying I didn't really know the line with unclear and I think in some cases that was true there is some gray area in this I guess the only other point I would make is that there were a lot of legal experts who said listen you know if you're a hedge fund manager of any reputation you know it when you see it I mean if if you're beating of inside information black edge as I call it comes your way you know it when you see it or in it and you should know it if you're running a big hedge fund and I think that's also a fair point let's talk a little bit about when things that she began to fall apart so on the legal side who actually picked up that essay see were doing something they perhaps shouldn't be doing the government was in the middle of this big insider trading investigation that had led to the arrest of Raj Rajaratnam who was another big tech hedge fund manager not as well-known as pecan but he had been arrested was waiting to go to trial and they continued investigating and they had developed a lot of sources a lot of co-operators in that rajaratnam case and a lot of people were just reporting to the the eye and even to the SP that they should look at si city capital and they did then they started to sort of turn their attention to si si start to find people they could possibly flip turn into co-operators and some of the first most fruitful tips that they got though arose right out of that rajaratnam case you know then it was just painstaking work I mean at one point the SEC gathered up all of the suspicious trading reports you know every time there's a suspicious trade and someone complains about it in the market there's a regulator who who gets sort of a letter saying oh this fund made a suspicious trade I won't point - the Security and Exchange Commission which is responsible for policing the markets said you know we're going to look at all of the referrals regarding SEC capital and the huge box of just dozens of these referrals I mean they were just constantly raising red flags and then they then they had to go and start piecing it all together through this very painstaking fashion of it have to look at each suspicious trade and and figure out who who made the trade and is it possible they could have had inside information to make this trade and that is how the market on which case really came together then we made they figured out that SEC capital had made this enormous profit one week before these drug trial results became public and that looked very fishy and then they started trying to figure out okay who who works at SEC capital might know someone who was involved in this drug trial who would have had access to confidential information about these drug trials and eventually in a minute literally this took a couple of years they found the connection between the doctor and Mathew martoma of the portfolio manager at SEC capital and even when they had those two names they had to then go and try and find evidence to sort of use to encourage the doctor for example to cooperate and eventually after many many months of pressure that doctor agreed to flip and testify for them and that was that was serve a huge break in their case when si se realized that they were being investigated I mean what some of the things that they did to try and cover their tracks to avoid being caught because I remember when I watched the documentary the frontline documentary how to catch a traitor which is mostly about Steve Cohen I remember that like the opening scene a guy talks about taking a computer harddrive smashing it with a hammer and then splitting it amongst four different rubbish bags and then walking around Manhattan throwing it in different garbage trucks are there any other stories like this well yeah I mean yes that was a pretty dramatic story there were people who went and it was sort of shredding all their file there was one guy in particular he didn't work at sa C but he was friends with some sa fee traders so they were all swapping information and this but this particular hedge fund manager he you know he read a leak in the Wall Street Journal like an article report of described that the case was going on and he panicked because he knew he was guilty and you know he he ordered one of his underlings to go and destroy all of their files in their office and he tried to delete the hard drives in his computer this other SEC capital portfolio manager you just mentioned yeah he did destroy his he had a bunch of thumb drives where he was keeping all his inside information he smashed them up that particular guy didn't even know it at the time but his his very good friend ended up wearing a wire and recording him on implicating him and they both ended up being charged you know it's hard to know I mean there's some things we don't know in terms of what happened the government was very convinced that there was a lot of evidence being destroyed and this prompted them in 2010 to actually go and raid a handful of hedge funds they literally stormed into three different hedge funds one of them had been started by I see two of them had been started by former SEC capital traders so they were very closely connected to C Cohen and I think the government felt that they would get evidence connected to Cohen you know from these two funds although they never really did but they literally walked in there with a warrant on a Monday morning and took out their hard drives and all their files and this was a really big deal you know hedge funds were not very happy to see the FBI storming into their offices no command in the end yeah it was a really and in the end it was it really was kind of an overreach I mean they didn't get anything it was very valuable and those funds ended up shutting down because that was just so damaging to their reputations so the government was criticized very heavily for for being too heavy-handed with some aspect of this right so how did all of this play out like was si si ever prosecuted for these claims of insider trading well so there was a very dramatic moment in 2013 when several years into this investigation there was a lot of speculation that Steve Cohen was going to be charged who can be indicted he might go to jail I know he was nervous about this you know a lot of reports about his investors panicking and pulling their money out so in the middle of all this his team of defense lawyers because of course he had the best lawyers money could buy they they went down to the US Attorney's Office and they made a big presentation to try and convince the government not to charge he's going and they were there for four hours and they basically you know they had some sense of what the evidence was that the government had a mask and that they were considering what to do with this evidence so they walked the government to this eminence and basically their argument came down to you know Steve Cohen doesn't read his email there were a couple of very damning emails that they the government had found that seemed like they had made their way to Steve Cohen and sheep Khan's lawyer said you know he doesn't read his email there's no evidence he read this email you don't have any witnesses to testify against him you can't prove anything you're going to lose in court is going to be humiliating and he just sort of you know scared them all so they ended up deciding to indict you Cohen's firm shd capital instead of Steve Cohen himself and they mandated that the hedge fund be shut down which it was and that Steve Cohen's company which which basically means Steve Cohen himself had to pay 1.8 billion dollars to resolve the criminal charges and also SEC charges and of course it was all very humiliating and you know his reputation was tarnished and I don't think Steve Cohen was very happy about it but you know it was not a very satisfying ending for a lot of people because Steve Cohen himself did not go to jail or even have to go to trial and in fact he can start a new hedge fund in 2018 if he chooses which strike some people is unfair I had no idea that he never even went to trial that's really incredible well Sheila I appreciate you coming on the podcast I'm going to mention if anyone wants to pick up a copy of Sheila's book titled black edge I'm going to set up a link chat with traders comm slash black edge and that will redirect you directly to the book black edge on Amazon yes Sheila once again thank you very much for coming on the podcast if in on wants to fly you on Twitter what's your Twitter handle it is at Sheila Kay which is sh e e la HK and it was a pleasure to be with you thanks great thank you very much you reach the end of this episode of chat with traders but rest assured there are more episodes loaded with real market insight and zero hype on the way soon so to stay updated with each great new release subscribe to the podcast in iTunes and we'd love it if you 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Channel: Chat With Traders

Views: 60,440

Keywords: sheelah kolhatkar, black edge, steven cohen, insider trading, most wanted man on wall street, to catch a trader, hedge fund billionaire steven cohen, steve cohen, to catch a trader documentary, sac capital, point72, the fabulous life of wall street billionaires, day trading success, successful day trading, profitable day trading, day trading strategies, what is insider trading, biggest insider trading story, inside the life of a trader, insider trading explained

Id: IzXl-eBfI-A

Length: 42min 41sec (2561 seconds)

Published: Sun Jul 30 2017