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Black Edge: Inside Information, Dirty Money,…

Black Edge: Inside Information, Dirty Money, and the Quest to Bring Down… (edition 2018)

by Sheelah Kolhatkar (Author)

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1598117,856 (3.9)7
"The story of billionaire trader Steven Cohen, the rise and fall of his hedge fund SAC Capital, and the largest insider trading investigation in history--for readers of The Big Short, Den of Thieves, and Dark Money Steven A. Cohen changed Wall Street. He and his fellow pioneers of the hedge fund industry didn't lay railroads, build factories, or invent new technologies. Rather, they made their billions through speculation, by placing bets in the market that turned out to be right more often than wrong--and for this, they gained not only extreme personal wealth but formidable influence throughout society. Hedge funds now oversee more than $3 trillion in assets, and the competition between them is so fierce that traders will do whatever they can to get an edge. Cohen was one of the industry's biggest success stories, the person everyone else in the business wanted to be. Born into a middle-class family on Long Island, he longed from an early age to be a star on Wall Street. He mastered poker in high school, went off to Wharton, and in 1992 launched the hedge fund SAC Capital, which he built into a $15 billion empire, almost entirely on the basis of his wizardlike stock trading. He cultivated an air of mystery, reclusiveness, and 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 image was shattered when SAC Capital became the target of a sprawling, seven-year investigation, led by a determined group of FBI agents, prosecutors, and SEC enforcement attorneys. 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 pleaded guilty to charges of securities and wire fraud in connection with a vast insider trading scheme, even as Cohen himself was never charged. 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 takes readers inside the government's pursuit of Cohen and his employees, and raises urgent and troubling questions about the power and wealth of those who sit at the pinnacle of modern Wall Street. Advance praise for Black Edge "A tour de force of groundbreaking reporting and brilliant storytelling, a revealing inside account of how the Feds track a high-profile target--and, just as important, an unsettling portrayal of how Wall Street works today."--Jeffrey Toobin, New York Times bestselling author of American Heiress "Black Edge is not just a work of major importance, it is also addictively readable--and horrifyingly compelling. Sheelah Kolhatkar pulls back the curtain on the cheating, corruption, and skulduggery that underlie large swaths of the hedge fund industry and some of Wall Street's most fabled fortunes. This book is as hard to put down as it is to stomach."--Jane Mayer, New York Times bestselling author of Dark Money "Fast-paced and filled with twists, Black Edge has the grip of a thriller. It is also an essential expose of our times--a work that reveals the deep rot in our financial system. Everyone should read this book."--David Grann, New York Times bestselling author of The Lost City of Z"--"Steven A. Cohen is a Wall Street legend. Born into a middle class family in a decidedly upper class suburb on Long Island, he was unpopular in high school and unlucky with girls. Then he went off to Wharton, and in 1992 launched the hedge fund SAC Capital, which grew into a $15 billion empire. He cultivated an air of mystery and reclusiveness -- at one point, owned the copyright to almost every picture taken of him -- and also of extreme excess, building a 35,000 square foot house in Greenwich, flying to work by helicopter, and amassing one of the largest private art collections in the world. But on Wall Street, he 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 Wall Street history, led by an undermanned but determined group of government agents, prosecutors, and investigators. Experts in finding and using "black edge" (inside information), SAC Capital was ultimately fined nearly $2 billion -- the largest penalty in history -- and shut down. But as Sheelah Kolhatkar shows, Steven Cohen was never actually put out of business. He was allowed to keep trading his own money (in 2015, he made $350 million), and can start a new hedge fund in only a few years. Though eight SAC employees were convicted or pleaded guilty to insider trading, Cohen himself walked away a free man. Black Edge is a riveting, true-life thriller that raises an urgent and troubling question: Are Wall Street titans like Steven Cohen above the law?"--… (more)
Title:Black Edge: Inside Information, Dirty Money, and the Quest to Bring Down the Most Wanted Man on Wall Street
Authors:Sheelah Kolhatkar (Author)
Info:WH Allen (2018), 368 Seiten
Collections:Your library
Tags:lang:en, sachbuch, finanzwirtschaft, new york city, hedge funds

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Black Edge: Inside Information, Dirty Money, and the Quest to Bring Down the Most Wanted Man on Wall Street by Sheelah Kolhatkar



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Showing 1-5 of 8 (next | show all)
Extremely readable, and timely. The focus stays narrow, so we don't get much context. Unfortunately, nor do we get too much insight into Steven Cohen, and only limited insight into his employee Mathew Martoma (who takes the fall rather than cooperating with prosecutors against Cohen). What we do learn is certainly interesting. The story is also rather depressing. Basically Cohen steals billions of dollars and not only gets away with it, but the government regulators end up working for him. His lawyer goes to work in the Trump administration.

> an advance team of consultants made the journey ahead of him. He rented an extra room wherever he was staying and used it as a staging area where his staff re-created his trading station

> Expectations for bapi had become massively inflated. The results wouldn't be released to the public for another nine days, but Martoma could see clearly how this would be interpreted by the market: Elan and Wyeth shares would crash once this news got out. … Over the next nine days, Cohen's trader sold 10.5 million shares of Elan. Another trader did the same thing with SAC's Wyeth position. No one in the market could see that SAC was selling. Even after liquidating his position, Cohen wasn't finished. Once the selling was done, Cohen shorted 4.5 million shares of Elan, worth $960 million.

> SAC was organized to insulate Cohen from the behavior of the lower-level traders and analysts. All of the ideas for trades were filtered through layers of portfolio managers and assigned codes for how strong they were before they reached him—a "high conviction" idea might be given to the boss without explaining why the analyst was so sure about it

> The use of these expert networks was widespread in the hedge fund industry—once a few funds started using them, everyone else had to do so as well to try to keep up with their competitors. It had become obvious to investigators that many of the expert networks provided a cover for the exchange of inside information,

> In the past, the criminal prosecutors and the SEC had tried to coordinate the timing of their filings to avoid interfering with one another. It was essential that they maintain a unified front. Not only was the SEC violating that implicit agreement to work together, they were racing ahead with a weak case—failure to supervise instead of insider trading.

> Lorin Reisner, the head of Bharara’s criminal division who helped negotiate SAC's $1.8 billion fine, became a partner at Paul, Weiss, the same law firm that supplied Cohen's legal defense team. Antonia Apps, the prosecutor who tried the Steinberg case, left the government for a partnership at Milbank, Tweed, Hadley & McCloy, another corporate law firm where she does white collar defense work. Bharara's deputy, Richard Zabel, announced that he was taking a job as general counsel at a hedge fund called Elliott Management, which is run by the prominent billionaire political donor Paul Singer. After twenty-five years with the FBI, B. J. Kang's former supervisor, Patrick Carroll, joined Goldman Sachs as a vice president in its compliance group. … Amelia Cottrell, a senior enforcement attorney at the SEC who oversaw the agency's Martoma investigation. At the end of June 2015, she shocked her colleagues by announcing that she was joining Willkie Farr, the firm where Cohen's longtime defense counsel Marty Klotz worked

> The general counsel for Point72, Cohen's private investment firm, was appointed, briefly, by the incoming Trump administration to recruit candidates for the new Justice Department ( )
  breic | Dec 29, 2019 |
Black Edge documents the investigation and prosecution of the insider trading and one of the most powerful hedge funds, SAC Capital run by Steve Cohen. Hedge funds in general have the aura of dishonest conductive by nature of their very foundation and secrecy. Yet they are and probably will be successful in their quest of wealth.

In this particular fund Cohen was able to build up a team of traders who he allegedly encouraged to funnel insider information to take that advantage edge, albeit illegal. Yet try as the might the SEC and other prosecutors never were able to tag the big fish, Cohen, and despite breaking up the fund he goes on his merry way with his billions.

And so the despite some of the smaller fish being busted and sentenced for the illegal conduct the big fry gets away and moves on down the road. Many of those enforcement folks then move on to lucrative law firms eventually hired by the billionaire scofflaws and the beat goes on. The American financial system as it is. ( )
  knightlight777 | Oct 13, 2019 |
Sometimes the villain wins and the good guys don't get their man. Basically that's what this book is all about. Steve Cohen is the CEO of SAC Capital, a very thriving hedge fund in the 1980s. To be successful and profitable, it helps that they fund has a "black edge." This involves access to information not known to the general investor or to other investment firms or banks. Knowing what the quarterly results are of a company or finding out how well a company's proposed new product is progressing prior to the information being released is a huge strategic advantage – – but it's also illegal.

How Steve Cohen protected himself from indictment and prosecution given that all the pawns around him were ensnared by regulators and the FBI is the crux of this book. This book reads like a novel – – a great deal of information about the personalities, motivations and histories of the various characters within the story. The lifestyles of the various characters in the book, particularly Steve Cohen's is very interesting reading. Cohen's relationships with his ex and current wife was fascinating also...

There are a number of surprise endings on how things for various characters as this book concluded. This was not your typical stodgy business book. I really enjoyed the story and the lessons to be learned from this period. An excellent read. ( )
  writemoves | Jun 17, 2019 |
Black Edge by Sheelah Kolhatkar is a riveting true-life legal thriller that takes readers inside the government’s pursuit of one of the biggest player on Wall Street. To some extent, it is also about the hedge fund industry which got started around 1950, however, the current form is known for 30 years. Specifically, the book tells the story of Steven Cohen who started one of the largest hedge funds which was called S.A.C. Capital.

For those who need a quick recap, a hedge fund is an investment fund that pools capital from accredited individuals or institutional investors and invests in a variety of assets, often with complex portfolio-construction and risk-management techniques.

When it comes to Steven Cohen, the book provides a really comprehensive introduction – “Steven Cohen changed the Wall Street. He and his fellow pioneers of the hedge fund industry didn’t lay railroads, build factories or invent new technologies, rather they made their billions through speculation by placing bets in the market that turned out to be more right than wrong, and for this, they gained not only extreme wealth but formidable influence throughout society. Hedge funds now oversee more than three trillion dollars in assets.”

Since many hedge funds make money ... (if you like to read my full review please visit my blog https://leadersarereaders.blog/2019/01/03/blackedge) ( )
  LeadersAreReaders | Feb 19, 2019 |
I registered a book at BookCrossing.com!
http://www.BookCrossing.com/journal/14529868 ( )
  aquamari | Jan 6, 2019 |
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