Black Edge

December 15, 2016
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.

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October 1, 2016

Staff writer at The New Yorker, Kolhatkar profiles Steven A. Cohen, a Wall Street stock-trading genius and man of excess who launched the hedge fund SAC Capital in 1992 and built it into a $15 billion empire. It all came tumbling down with a seven-year criminal and SEC investigation on insider trading (called using "black edge") that shuttered SAC Capital and fined it nearly $2 billion.

Copyright 2016 Library Journal, LLC Used with permission.

Starred review from January 1, 2017

Kolhatkar's (staff writer, The New Yorker) book provides the most details about the Securities and Exchange Commision and FBI investigations into insider trading in New York in the past ten years, coming after Charles Gasparino's Circle of Friends, Anita Raghavan's The Billionaire's Apprentice, and the PBS Frontline documentary To Catch a Trader. The "black edge" of the title refers to insider information used by hedge fund traders to cheat. The subject of this book is Steven A. Cohen's former firm, SAC Capital, which pled guilty in 2013 to criminal insider trading and paid a $1.2 billion settlement. Cohen avoided personal liability. Organized chronologically, this volume starts with the FBI investigation into convicted billionaire Raj Rajaratnam. It ends in 2015 with Cohen emerging unscathed and ready to return to trading other people's money. Unlike Circle of Friends, which covers the same ground, this book benefits from Kolhatkar's access to the post-2013 criminal trials and government investigators. She notes wryly that the attorneys who pursued Cohen have moved into representing the industry, which is now more complex and successful than before. VERDICT Well-written, with pointed characterizations of the ambitious players and their motives, this book is highly recommended for readers interested in finance, crime, and politics. [See Prepub Alert, 8/26/16.]--Harry Charles, St. Louis

Copyright 2017 Library Journal, LLC Used with permission.