There is a later scene that builds on this and makes it even more compellingly blatantly cleaving to the letter of the law rather than the spirit. Black Edge can be read as a true crime suspense book or as a journalistic revelation of how greed and corruption works in the hedge fund business. I found it worthwhile on both levels not knowing how things would turn out.
It’s not a whodunit, but rather a question of whether the perpetrators will be brought to justice. We learn a lot about law enforcement and financial regulation and their limits with respect to insider trading. The story revolves around SAC Capital Advisors and its founder Steven A. Cohen, who used his hedge fund to become one of the richest people in the United States. Kolhatkar gives us a very human presentation and one doesn’t need much financial trading strategy expertise to understand it. She did a great deal of research and crafts a compelling read that can be appreciated by both investors and the politically minded concerned about Wall Street. I am leaving this review brief to not spoil it for those unfamiliar with the story. A nonfiction book describing in detail Steve Cohen’s rise as the most prolific trader on Wall Street and the eventual FBI and SEC investigation into his hedge fund.
I started this on my kindle and ended on audio. This gave me a lot more insight into the financial world and a lot of the layered corruption that goes on there. I’m definitely not going to quit my day job and become a trader after reading this as I’m still pretty confused about how hedge funds work, but I do have a better grasp now.
It’s hard to understand today’s hedge funds without remembering how the market used to work, and where the “edge” originally came from. A gripping account of one of the most successful hedge funds of all time. If you’ve enjoyed Michael Lewis books about the financial industry, this one will be right up your alley. Unfortunately, the real-world story arc does not get its desired Hollywood finish, although it’s all super interesting and cautionary.
I’m not really sure what else I can say except like wow maybe I should switch career paths now and just become a financial analyst. Especially the ending of the book where they talk about the deregulation and acquittal of so many of the people convicted of insider trading. I just can not believe they’re going to let insider trading become so narrow in scope and I can not believe Cohen got to keep billions of dollars and that he’ll be able to start opening up his hedge fund to outside investment again this year after everything. I also cannot believe how much people pay for art. I know art is important but it just feels so god damn gratuitous to pay $140+ million for a painting when he bought his house for like $14 million.
And not coincidentally, this was the period leading up to the financial crisis. I mean, I think there were a lot of things going on in the financial world that were not legal, not ethical. And because hedge funds only accepted money from very wealthy and sophisticated investors, they were given a longer leash by the regulators to take risks in the market. They were allowed to borrow money to invest at much higher levels than a regular mutual fund, for example.
I’m no Wall Street aficionado but Kolhatkar’s a terrific writer who makes the murky world of hedge funds come to light and to life. Recommended, especially to those who wonder why all the architects of the 2008 financial crisis aren’t in jail. Ever since the financial crash of 2008, I have felt that Wall Street is no longer part of financial institution of the United States. It’s like Wall Street went rouge and serves only a few who consider themselves Masters of The Universe . Stephen Cohen, the star of this book, is one of those Masters of the universe having built a multi-billion dollar hedge fund using insider trading. I always tell my husband, if he or I committed any of the acts the Cohen and his cohorts did we would be locked up for life, the rich are different.
This has even led to the “demonizing” of target companies that specific individuals were planning to benefit from; publicly ridiculing a company to force their stock prices to drastically go down . One day, one of the FBI supervisors sort of came in and said to one of his best agents – B.J. Kang, who’s a character in my book – he said, listen, hedge funds are huge. There’s a lot of money in these things, and we have no idea what is going on. You know, they started investigating and it started to seem like there was sort of rampant crime going on at this time.
‘black Edge’ Recounts The Biggest Insider
His natural instincts make him a star trader almost immediately. Fearless and self-confident, he generates huge profits by trading large blocks of stock at high frequency. The story starts with a engaging summary of Steve “Stevie” Cohen’s rise from Brooklyn kid to the most successful day trader on Wall Street. I’d recommend the book just for that part of the story.
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. and why was he at the center of a major investigation? In an industry driven by information, SAC was just one of many hedge funds looking for an edge, an information edge to make more money from trades. And finally, hedge funds no longer “hedged their bet”……they just traded however they liked to maximize profits. This trend took off in the financial sector and is now the huge swing in corporate American focus that everyone grumbles about today. Short term investments, at the sacrifice of the long haul.
My favorite part of the book was the behind the scenes look at law enforcement going after insider trading. When Martha Stewart’s case went down in all seemed so quick and easy (I’m sure it wasn’t), this book shows just how hard it is to prove wrong doing, and how it is even more difficult to prosecute. Its pioneers didn’t lay railroads, build factories, or invent new technologies. Rather, they made their billions through financial speculation, by placing bets in the market that turned out to be right more often than not. In hedge fund circles, Steven A. Cohen was revered as one of the greatest traders who ever lived. But that image was shattered when his fund, SAC Capital, became the target of a seven-year government investigation. Black Edge is a riveting legal thriller that raises urgent questions about the power and wealth of those who sit at the pinnacle of high finance and how they have reshaped the economy.
For Further Reading
They were certainly not poor, but they were not wealthy. And I think that growing up, he was surrounded by a lot of affluence in Great Neck. He was a very, very talented poker player in high school. And then he went off to Wharton, studied business there. And then he launched his hedge fund, SAC Capital, Keys to Heaven’s Economy Review in 1992 with $25 million and very quickly achieved enormous success. Ruthless hedge fund owner Stephen A. Cohen is the subject of Sheelah Kolhatkar’s new book, Black Edge. The story begins as Cohen graduates from Wharton and begins his career at a small brokerage firm in lower Manhattan.
- Many such cases then get thrown out on appeal.
- This book highlights the efforts of one firm, SAC and its leader Stephen Cohen, who miraculously made money under all conditions because they trafficked in insider information which they obtained in a variety of surreptitious ways.
- It’s little wonder the forces of justice feels the cards are stacked against them.
- The bottom feeders peddle phoney securities to unsuspecting chumps.
- Despite the efforts of the US department of Justice and the SEC it was very hard to build cases against these guys who can afford the very best legal talent to defend themselves.
- Guys like the ones in the book are far more dangerous, engaging in insider trading (the ‘black edge’) to earn obscene returns.
They were allowed to short stocks, which is essentially borrowing a stock and selling it and betting that it will go down. But hedge funds, because they were only taking money from investors who could afford to lose the money, they were given this extra freedom. And, you know, he really has a sort of rags-to-riches story that people in the financial world love.
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Despite the efforts of the US department of Justice and the SEC it was very hard to build cases against these guys who can afford the very best legal talent to defend themselves. Many such cases then get thrown out on appeal. It’s little wonder the forces of justice feels the cards are stacked against them. The book implies that many more of these abuses will come as the financial system becomes more complex, and with a current administration less interested in combatting the excesses of Wall Street. Its little wonder that the average person has lost faith in Wall Street when its major players hold all the cards and get away with fines they can well afford to pay. This is FRESH AIR. I’m Dave Davies in for Terry Gross, who’s off this week visiting family. It’s a ridiculous question for most of us, but to the most successful Wall Street hedge fund managers that’s just not a lot of money.
Guys like the ones in the book are far more dangerous, engaging in insider trading (the ‘black edge’) to earn obscene returns. This book highlights the efforts of one firm, SAC and https://forexarena.net/ its leader Stephen Cohen, who miraculously made money under all conditions because they trafficked in insider information which they obtained in a variety of surreptitious ways.
Also it’s just incomprehensible why anyone would need to have that kind of wealth when we literally let people in this country live with food insecurity. I know that Cohen ‘worked’ for his money but his work just involved bullying subordinates into getting information he shouldnt have access to anyway and shorting stocks, so basically waiting for companies stock prices to tank. And even worse didn’t Preet Bharara get fired or resign after Trump came into office. Are we really going to punish people who try to hold any of those white collar criminals responsible. I’m going to go look at masters degrees in financial analysis. I followed all the pieces of this story when it was in the news but it was nice to have it all in one place. This is a nice intro into hedge funds, insider trading, and financial crimes.
Our guest, Sheelah Kolhatkar, writes that in 2006, the lowest-paid person on the list of the top 25 earning hedge fund managers made $240 million just that year. One of the top earners was Steven A. Cohen, whose firm was at the center of a massive insider trading scandal Kolhatkar writes about in a new book. A financial thriller that is (very unfortunately, given the bad-guys-win conclusion) nonfiction.
but He Chose To Earn Money The Illegal Way
Sheelah Kolhatkar’s book is the rather shameful history of a hedge-fund mogul Steven Cohen, his cronies and associates who went on to earn billions based on black edges they ruthlessly gathered from around the world. False friendships, lies, bribes, enticements, inducements, flattery, % shares and every other trick available in the book of sleaziness. The cut-throat world of hedge funds and Wall-street egomaniacs, make money for money’s sake – a self-propagating, a selfish loop which cuts through ethics, law and in some cases even humanity like a hot knife through butter. 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. The bottom feeders peddle phoney securities to unsuspecting chumps.