A formulaic but still intriguing financial cops-and-robbers story.
Billionaire Steven Cohen (b. 1956) was a perfect fit at Wharton, its culture “driven by the worship of money.” Brilliant and driven, he was a perfect fit on Wall Street, where, in the 1970s, he became a pioneer of a certain kind of hedge fund, making millions every year right out of the gate. The time was perfect, too, in a deregulated Reagan-era financial market that thought nothing of risk and even less of the law. Cohen’s methods hinged, writes New Yorker staffer and financial-industry veteran Kolhatkar, on the accumulation of huge amounts of information—much of it along the “gray” edge, much more of it deep into black territory, “information that was obviously illegal,” the stuff on which insider-trading convictions hang. By the author’s account, Cohen is emphatically not a nice guy; she writes of how he skillfully hid assets during a divorce and of his tyrannizing employees: “For traders, getting a job at SAC was like pulling the pin out of a grenade: It wasn’t a question of if you would blow up, it was a matter of when.” It was also not a question of if the authorities would eventually catch up, and here Kolhatkar’s tale assumes a certain inevitability, with good but indifferently socialized investigators, forensic accountants, and informants chasing after enough hard evidence to put an end to Cohen’s manipulations. The upshot of the book is an inevitability of another kind, perhaps: although the punishment leveled at Cohen was astonishing on paper—close to $2 billion—it brought a nonapology by way of apology (“we greatly regret this conduct occurred”), and Cohen is preparing to resume his activities on the trading floor.
It’s a story that requires lots of insider information of its own kind to write, and Kolhatkar handles the job well though without the narrative flair of Michael Lewis’ kindred book Flash Boys.