Black Edge: Inside Information, Dirty Money, and the Quest to Bring Down the Most Wanted Man on Wall Street

by Sheelah Kolhatkar

Overview

NEW YORK TIMES BESTSELLER • A riveting, true-life legal thriller about the government’s pursuit of billionaire hedge fund manager Steven Cohen and his employees at SAC Capital—a revelatory look at the power and wealth of Wall Street
 
ONE OF THE BEST BOOKS OF THE YEAR—The New York Times and The Economist • “An essential exposé of our times—a work that reveals the deep rot in our financial system . . . Everyone should read this book.”—David Grann, author of Killers of the Flower Moon

Steven A. Cohen changed Wall Street. He and his fellow pioneers of the hedge fund industry 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.
 
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. Prosecutors labeled SAC a “magnet for market cheaters” whose culture encouraged the relentless pursuit of “edge”—and even “black edge,” which is inside information—and the firm was ultimately indicted and pleaded guilty to charges related to a vast insider trading scheme. Cohen, himself, however, was never charged.
 
Black Edge raises urgent and troubling questions about those who sit at the pinnacle of high finance and how they have reshaped the economy.

Finalist for the New York Public Library’s Helen Bernstein Book Award for Excellence in Journalism • Longlisted for the Andrew Carnegie Medal for Excellence in Nonfiction and the Financial Times and McKinsey Business Book of the Year Award

Product Details

ISBN-13:	9780812985795
Publisher:	Random House Publishing Group
Publication date:	01/23/2018
Edition description:	Reprint
Pages:	368
Sales rank:	118,320
Product dimensions:	5.40(w) x 8.10(h) x 0.90(d)

About the Author

Sheelah Kolhatkar, a former hedge fund analyst, is a staff writer at The New Yorker, where she writes about Wall Street, Silicon Valley, and politics, among other things. She has appeared as a speaker and commentator on business and economics issues at conferences and on broadcast outlets including CNBC, Bloomberg Television, Charlie Rose, PBS NewsHour, WNYC, and NPR. Her writing has also appeared in Bloomberg Businessweek, New York, The Atlantic, The New York Times and other publications. She lives in New York City.

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Chapter 1
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Excerpted from "Black Edge"
by .
Copyright © 2018 Sheelah Kolhatkar.
Excerpted by permission of Random House Publishing Group.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.

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Table of Contents

Prologue: The Flip ix

Part I

Chapter 1 Money, Money, Money 3

Chapter 2 What Stevie Wants, Stevie Gets 27

Chapter 3 Murderers' Row 46

Part II

Chapter 4 It's Like Gambling at Rick's 65

Chapter 5 Edgy, Proprietary Information 81

Chapter 6 Conflict of Interest 94

Chapter 7 Stuff That Legends Are Made Of 108

Part III

Chapter 8 The Informant 133

Chapter 9 The Death of Kings 156

Chapter 10 Occam's Razor 173

Chapter 11 Undefeatable 192

Chapter 12 The Whale 206

Chapter 13 Karma 219

Chapter 14 The Life Raft 232

Part IV

Chapter 15 Justice 255

Chapter 16 Judgment 268

Epilogue 287

Cast of Characters 297

Acknowledgments 303

Notes and Sources 305

Index 337

Editorial Reviews

A modern version of Moby-Dick, with wiretaps rather than harpoons.”—Jennifer Senior, The New York Times

“Excellent.”—The Economist

“If you liked James B. Stewart’s Den of Thieves, Sheelah Kolhatkar’s thrilling Black Edge should be next on your reading list.”—The Wall Street Journal

“A lot of people do not trust Wall Street. They regard it as a moneymaking machine for those who work there, which has little interest in practice in its stated aim of channeling capital into businesses and helping them to grow for the broader benefit of society. For such skeptics, Steven Cohen is Exhibit A.”—John Gapper, Financial Times

“A richly reported, entertaining tale about the cat-and-mouse game between the government and Cohen.”—Andrew Ross Sorkin, The New York Times Book Review

“Masterfully deconstructing a massive web of Wall Street operating, New Yorker staff writer Sheelah Kolhatkar retraces the seven-year government investigation that took down the firm—though not the man—in a true-life thriller with Shakespearian stakes. . . . Her chilling account of a blighted industry is as mesmerizing as a human story as it is as a financial one.”—Fortune

“There are few financial-industry struggles as titanic as the one portrayed in these pages.”—Reuters BreakingViews

“One of the best books about the 2008 financial meltdown.”—The Globe and Mail

“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.”—Library Journal (starred review)

“Black Edge is not just a work of major importance, it is also addictively readable—and horrifyingly compelling. Sheelah Kolhatkar pulls back the curtain on the cheating, corruption, and skulduggery that underlie large swaths of the hedge fund industry and some of Wall Street’s most fabled fortunes. This book is as hard to put down as it is to stomach.”—Jane Mayer, New York Times bestselling author of Dark Money

“Black Edge is a real-life thriller about the government’s attempt to get the legendary trader Steve Cohen on insider trading charges—and the lengths to which he goes to elude them. Using deep reporting and top-notch storytelling, Sheelah Kolhatkar is able to shed new light on one of the least known and most fascinating characters on Wall Street.”—Bethany McLean, co-author of The Smartest Guys in the Room

From the Publisher

If Black Edge weren't about real life, it would be an uncomplicated pleasure to read. The book is many things: a Wall Street primer; a procedural drama; a modern version of Moby-Dick, with wiretaps rather than harpoons. Kolhatkar…expertly synthesizes an enormous amount of material, including court documents and hundreds of her own interviews. Cohen was not among them, alas…But his silence may also have been liberating to Kolhatkar, who was not psychologically constrained by gratitude to her subject for letting her in. She does not spare us her judgments of Cohen or of SAC Capital or of the hedge fund industry. They are not favorable.

The New York Times - Jennifer Senior

★ 01/01/2017
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

Library Journal

2016-12-08
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.

Kirkus Reviews