The Wall Street Second-Chances Rule: Scandal Makes the Rich Grow Stronger

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https://www.commondreams.org/view/2014/04/13-1


If Gordon Gekko was the fictional Godfather of Wall Street with his own sequel, Steven A Cohen is the real one (Image: 20th Century Fox)

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But this isn't the middle class, and Steve Cohen is not some hapless homeowner caught helplessly in foreclosure. He is rich, and on Wall Street that means he has leverage. He can negotiate for his own redemption – like so many of his fellow billionaires before him.

"Can Steven Cohen move on from SAC's insider trading past?" Frontline asked this week, and the answer is that he already has. Without even a moment of silence for the past of SAC Capital, Cohen's second act is already underway, with a new firm called Point72 Asset Management that exists solely to manage his multibillion-dollar fortune.

Cohen is not just any hedge-fund manager. If Wall Street had a Godfather, it would be Cohen. He ran SAC Capital, a $15bn hedge fund with a trading floor in Stamford, Connecticut, where he controlled every aspect – including temperature and sound. In order to maintain tombstone silence, phones were set to blink instead of ring. Temperatures of 70 degrees forced traders to stay alert all day, spurring the firm's fashion armor: black fleece jackets with the SAC Capital logo – like a very rich, very exclusive street gang. Video cameras observed every employee.

Steve Cohen is not a man who likes to leave things to chance. That has proven to be a profitable strategy on Wall Street. Cohen made $2.3bn last year. It's hard to picture that kind of wealth, but it comes to just over $262,000 an hour – if you count all the hours in 2013, including the ones during which he was sleeping and staring at computer screens and talking with his lawyers. That's a pretty good haul considering that 2013 was an annus terribilis, in which Cohen was being pursued by the most aggressive prosecutor of Wall Street crimes; in 2012, a less grim year, Cohen made $1.4bn, according to Alpha, a trade magazine for hedge funds.