The Taming Of The Trading Monster

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Illustration by Kristian Hammerstad


“Even billionaires have feelings,” Alexandra Cohen had taken to saying. Her husband, Steve Cohen, is the billionaire in question. He’s one of the most successful hedge-fund managers in history—“the Michael Jordan of trading,” in the words of one Wall Street observer. He’d built SAC Capital Advisors into one of the most profitable hedge funds in the world while amassing a net worth estimated at $11 billion. Cohen was never known for his attention to feelings. He had a reputation for brusque, money-talks-bullshit-walks office interactions. He was the opposite of a ­sentimentalist—if one of his traders missed his numbers, he was gone.

But that was before U.S. Attorney Preet Bharara, suspecting him and his firm of insider trading, began pursuing Cohen as if he were a crime boss. Federal agents bugged his home phone and raided the offices of former employees who’d started their own hedge funds. They subpoenaed millions of pages of SAC documents while working their way up the chain of command, flipping one former employee after another. They even had one past portfolio manager attempt to infiltrate Cohen’s company by getting himself rehired, though Cohen didn’t take the bait.

As Bharara’s web closed around him, Cohen complained to associates that his success had made him a target. “I’m not doing anything different than a hundred other people have done,” he said to a colleague. “It’s not who I am, it’s what I am.” He called Wall Street peers, trolling for sympathy: “I feel like I’m watching a bad movie and I’m the star,” he’d say. On vacation one year, he ran into a fellow hedge-fund manager: “It’s not fair,” he complained. “Why me?”

The denouement of a pursuit so relentless could not have been other than an anticlimax. Ultimately, Bharara couldn’t make a case against Cohen, but at a press conference on July 25, 2013, the prosecutor announced a sweeping indictment against his company. Bharara’s language was as brutal as anything Cohen had ever said on the trading floor. Among other things, he called SAC “a veritable magnet of market cheaters” and suggested that Cohen bore responsibility for “institutional indifference to unlawful conduct [that] resulted in insider trading that was substantial, pervasive, and on a scale without known precedent in the hedge-fund industry.”

For Steve Cohen, there was an irony in Bharara’s quest: Several years before the indictment, the billionaire had already made a decision to change his life. Cohen had always been a homebody—though home was a ­country-­club-like Greenwich mansion on 18 acres, with a basketball court, an indoor pool, and a two-hole golf course (he seldom played on it). He bunkered there, or in one of his two East ­Hampton homes, surrounded by a billion-dollar art collection. The scenes he made most often were at Chelsea art galleries, accompanied by his youngest daughter, or on the sidelines at an older daughter’s soccer games.

Two decades earlier, he’d married Alexandra Garcia, a single mother he met through a dating service—she was the only one of 20 women who responded to his invitation. She, too, had few social ambitions. They didn’t entertain lavishly and seldom went to charity functions. When they did, their photographs didn’t appear in the society pages, because Cohen would buy up the rights to every available photo of himself. Mostly, their lives were organized around dinner, served every night at six. “We’re regular, we’re normal,” Alex insisted.

If on the trading floor Cohen was a voracious, unsentimental monster, working his will, conquering all he saw, and verbally thrashing any employee who made a ­misstep, off duty the swagger disappeared—he was just another zhlub in a polo shirt. Asked to give his opinion on the outlook for business, he would demur: “Who would want to hear what I have to say?”

With Steve Cohen, for a very long time, there were two dimensions: home and ­trading. He couldn’t even imagine another possibility. When a friend asked, “Why do you keep doing it?,” he responded, “What else is there to do?”

But by 2010, when he was 53, Cohen had undergone a change—some saw it as a midlife crisis. He’d begun to wonder what other talents he had, what other kind of person he could be.

One model was said to be billionaire George Soros, an unlikely aspiration for a suburban kid from Great Neck, Long Island—though the two shared the same Rain Man–like gift for seeing patterns in streams of numbers. Soros—a Hungarian-born Jew who had escaped the Holocaust and become an author, Ph.D., and billionaire investor—bubbled with ideas about the global economy and was determined to see them played out on the world stage.

Cohen had never been an intellectual—he bragged about playing poker through the University of Pennsylvania. And he’d never said a public word about politics. At SAC, no one knew if he was a Democrat or a Republican.