Uncovering Wall Street’s Biggest Insider-Trading Scandal

The investigation of billionaire hedge-fund trader Steven A. Cohen. Sheelah Kolhatkar, the author of “Black Edge: Inside Information, Dirty Money, And The Quest To Bring Down The Most Wanted Man On Wall Street,” discusses her findings in how Cohen’s hedge fund, SAC Capital, acquired enormous wealth by using illegal methods, black edge, and how common such practices are on Wall Street.

DAVIES: You tell this book in part through the experiences of the FBI investigators and other government investigators. And you describe how when they started listening to conversations of people in hedge funds and traders and they talked so casually about trading this illegal inside information, it made them wonder – does everybody do this? Is this just the way it is? You worked in a hedge fund early in your career. Did it seem that way to you?

KOLHATKAR: …(Laughter) SAC Capital. But yeah – in fact, at the time, you end up in these jobs and whatever’s going on around you just seems normal, and you don’t even necessarily know to question it. And it was only later, looking back on what I had done earlier in my career as a hedge fund analyst that I realized sort of what it was. I was trying to get edge, too. I spent my days trying to sort of analyze our different investments and get information about them. I certainly didn’t venture into any areas that would’ve qualified as black edge, for example, but I didn’t really know the difference. And it was generally understood that you wanted to get the best intelligence that you could.
Illustration: Le reve by Picasso, bought by Steven A Cohen for $155m

Fresh Air | 7th Febryuary 2017