AP ImagesBillionaire hedge fund manager Steven A. Cohen, who runs the super-secretive hedge fund SAC Capital Advisors, has a reputation on the Street for being one of the most successful traders.
Cohen launched his Stamford-headquartered hedge fund in 1992 with only $25 million. Today the fund has $14 billion assets under management and employees around 900 people globally.
During the late 1990s and early 2000s, Cohen came into prominence as a powerful Wall Street trader for his grand slam returns.
He’s been in the spotlight for a different reason.
Late last year, he was identified as “Portfolio Manager A” in the latest insider trading case against former CR Intrinsic (a subsidiary of SAC) portfolio manager Mathew Martoma. The New York Times recently reported that Cohen and others at the firm also received subpoenas to testify before a grand jury in the case.
It’s well-known that Cohen is the ultimate target of the government in their crackdown on insider trading.
While he has been implicated in the latest insider trading case, it’s important to keep in mind that he has not been charged with any wrongdoing. In fact, he may never be charged.
He’s maintained that he acted appropriately.
Now let’s get to know Cohen better.
He studied economics at the Wharton School of Business at the University of Pennsylvania.
He started his career on Wall Street at Gruntal & Co. He essentially became a legend on his first day.
After graduating in 1978, he went to Wall Street to work for at boutique investment banking and brokerage firm Gruntal & Co. as a junior trader in the options arbitrage group.
We've all heard the Wall Street legend that he made $8,000 his first day and was bringing in around $100,000 each day.
In 1992, Cohen rented office space nine floors above Gruntal to start his own $25 million hedge fund, SAC Capital.
Some of his traders from Gruntal joined him there.
SAC is headquartered in Stamford, Connecticut.
The super-secretive SAC Capital is one of those closely followed hedge funds on Wall Street. Here are some details about it what the trading floor is like:
Here's how the Wall Street Journal described the trading floor in a 2006 article:
The 20,000-square-foot trading room at SAC Capital Advisors, chilled to 70 degrees to keep traders alert, was hushed. Mr. Cohen, who sits at its centre, likes it that way. Phones blink rather than ring. Computer hard drives had been moved off the trading floor to eliminate hum. Rows of traders wearing SAC fleece jackets watched Mr. Cohen nervously, waiting for an order to sell shares.
In the early 1990s, Cohen hired psychiatrist Dr. Ari Kiev, who has worked with Olympians, to coach his traders in coping with stresses from the market.
He died in November 2009 at the age of 75.
Cohen has been married two times. In 1979, he got married to his first wife. The marriage didn't last long.
Years later, Patricia tried suing Cohen alleging he was running a racketeering scheme and hid millions from her.
In 2009, Cohen's ex-wife Patricia alleged that he hid millions from her and some of that money had come from insider trading in RCA shares back in 1985 before it was acquired by General Electric.
The case was ultimately dismissed in 2011.
Cohen met his wife Alexandra (Alexandra Garcia) through a dating service in 1991 after he divorced his first wife.
Alexandra was a single mum of Puerto Rican descent who grew up in Washington Heights.
They have four children together.
Source: Vanity Fair
The Cohens live in a 35,000 square foot home on 14 acres in Greenwich, Connecticut. They purchased the jaw-dropping mansion in 1998 for $14 million.
The lavish estate features a basketball court, an indoor pool and a 6,734 square-foot ice skating rink.
He did make an appearance on a talk show back in the 90's where he talked about sleeping with his ex when he was dating Alex.
It's widely known that Cohen is press-shy and super-secretive.
However, back in 1992 he made an appearance on an incredibly famous Hispanic talk show, 'Cristina' (she's like a Latin American Oprah) in an episode called 'He Acts Like Her Husband, Too.'
During the episode, Cohen talked about sleeping with his ex-wife when he started dating Alex, his current wife. He stopped when he got engaged.
Cohen has been collecting art since 2000.
His impressive art collection, which is said to be worth around $1 billion, includes pieces by Monet, Picasso, Jasper Johns, Jeff Koons, Damien Hirst, Willem de Kooning, Francis Bacon and Andy Warhol, according to a 2010 Vanity Fair profile.
Cohen, who is seen as a fixture at Art Basel, is missing at this year's high-profile art show in Miami, the New York Times reported.
Cohen has been playing poker since high school.
'It's the same with trading. I think about the risk. I think about the trade. I don't think about the money. Poker--that was the biggest determinant in my learning to take risks,' he told Vanity Fair in 2010.
In February 2012, he bought a 4 per cent stake in the Major League baseball team for $20 million, Reuters reported citing a person familiar with the deal.
Cohen actually grew up watching Mets games.
In November, former SAC portfolio manger Mathew Martoma was charged in what is believed to be 'the most lucrative' insider trading scheme ever.
Martoma worked at CR Intrinsic Investors, a subsidiary of SAC. He has been accused of using negative confidential drug trial info in pharmaceutical companies, Elan Corporation and Wyeth, between the summer 2006 and mid-July 2008.
Several media reports have identified 'Portfolio Manager A' in the complaints as Steve Cohen.
Cohen told investors in a client conference call that he's confident he acted appropriately. He has not been charged. He might not ever be charged.
The New York Times' Ben Protess and Peter Lattman reported that Cohen received a subpoena recently to testify before a grand jury in an insider trading investigation against his hedge fund.
Some might view this as the feds ramping up efforts to build a case against Cohen or SAC Capital.
Still, he has not been charged with any wrongdoing.
It was estimated investors would request to pull out $3.5 billion in addition to the $1.7 billion that was marked in the first quarter for redemptions during the latest quarterly deadline, June 4.
Remember, SAC manages about $15 billion. Of that, $9 billion belongs to founder Steve Cohen and employees and the rest is outsider money.
It was believed that SAC might have to turn into a 'family office' after the redemption requests. Bloomberg News reported that the hedge fund said it would not be closing to outsider money and that it didn't see any significant staff reductions.
In this particular case against Martoma, the complaints allege that the insider trading scheme involved information in pharmaceutical companies between the summer 2006 and mid-July 2008.
Under the statute of limitations for insider trading, if the government were going to bring additional charges in this case they would have to do so by mid-July, which is the five year anniversary of the trades in question.
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