Steve Cohen Was The Hedge-Fund King

An Investor

Introduction

Steve Cohen was a billionaire hedge-fund manager when the financial crisis struck ten years ago. The market collapsed, and the government enacted a host of new regulations, which it said were intended to prevent another crash. Hedge-fund managers like Cohen were vilified by politicians and the mass media. The public cried out for heads to roll on Wall Street. Gone were the days when hedge-fund managers could do anything they wanted. Most people assumed that Cohen’s career was over. But he is back, bigger than ever—and his comeback serves as an excellent lesson in what happens when you try to stop a genius from doing what they do best: innovating and succeeding at something no one else can do better than them!

Steve Cohen was a billionaire hedge-fund manager when the financial crisis struck ten years ago.

Steve Cohen was a billionaire hedge-fund manager when the financial crisis struck ten years ago. He was vilified by politicians and the mass media, who blamed him and his peers for causing the market collapse. In response, Congress passed legislation that required public companies to disclose their political spending and banned them from donating to super PACs unless they were owned by another company (e.g., Warren Buffett's Berkshire Hathaway owns several large public companies). That law also restricted how much money employees could give directly to candidates if they worked for a publicly traded firm. The SEC implemented new regulations on executive compensation: firms had to report any payments made over $1 million annually in addition to stock options and other compensation methods used prior to enactment - a rule still being contested today because of its potential impact on employee retention rates or incentive programs offered by companies who don't want their best people taking jobs elsewhere due to restrictive policies like these ones which were adopted in response

to events like 9/11 when "everything changed" after 9/11 happened

The market collapsed, and the government enacted a host of new regulations, which it said were intended to prevent another crash.

The financial crisis of 2008 was the worst since the Great Depression. It was caused by the housing bubble, which burst in 2007 and led to a collapse in home prices. The financial crisis triggered an economic recession that lasted from December 2007 to June 2009.

The collapse of Lehman Brothers on September 15, 2008, is often cited as marking the beginning of this period; however, there were other events that occurred earlier than this date:

• On March 13, 2008: Bear Stearns agreed to be acquired by JPMorgan Chase for $236 million after being taken over by the Federal Reserve Bank a few days earlier.

• On July 11, 2008: Washington Mutual failed; it was then sold off piecemeal to JB Hunt Transport Services Inc.,[13] Berkshire Hathaway Inc. and Umpqua Holdings Corp.[14]

Hedge-fund managers like Cohen were vilified by politicians and the mass media.

By the end of 2008, the American public would come to blame hedge-fund managers like Cohen for precipitating the financial crisis. In a poll conducted by Bloomberg News in December 2008, only 19% of respondents believed that hedge funds had been good for society. The industry’s critics singled out its high salaries and lavish lifestyles for particular scorn; Time magazine called hedge-fund managers “a new class of superrich” who lived in “gated communities and private clubs.” They were also attacked for their lack of transparency and accountability: Cohen was one of only three Wall Street traders who refused to testify before Congress about his business practices during an investigation into potential conflicts of interest between investment banks and their clients that lasted from October through December 2008 (the others were John Mack, then CEO of Morgan Stanley; and Lloyd Blankfein).

The public cried out for heads to roll on Wall Street.

The man in question is Steven A. Cohen, a billionaire hedge-fund manager who was dubbed "the most hated man on Wall Street" by New York magazine and "public enemy number one" by Time magazine. In 2014, Cohen's former firm SAC Capital—a $14 billion hedge fund—pleaded guilty to insider trading charges after being accused of using inside information from employees at publicly traded companies to make trades. The company pleaded guilty to 9 counts of securities fraud and agreed to pay nearly $1.8 billion in penalties, becoming the largest penalty ever paid for insider trading violations in American history (Cohen himself was never charged with criminal wrongdoing).

The public cried out for heads on Wall Street; they wanted someone held accountable for the financial crisis of 2008-2009 that led to the Great Recession. And there it was: Cohen's SAC Capital became the lightning rod for public anger over Wall Street greed and malfeasance—and he has been vilified by politicians and pundits ever since as a symbol of everything wrong with finance today.

Gone were the days when hedge-fund managers could do anything they wanted.

Gone were the days when hedge-fund managers could do anything they wanted. The regulators had a say in what they could and couldn't do, and they were no longer allowed to take as many risks as they used to.

Most people assumed that Cohen’s career was over.

In the late '90s, it was a bad time to be an investor. The market was depressed and hedge funds were vilified. Hedge fund managers were required to register with the SEC and open their books for inspection by regulators. The SEC was given more power to regulate hedge funds in general, which put many private investors off of investing in them.

But he is back, bigger than ever.

The 61-year-old Cohen is back, bigger than ever. In an industry where most managers struggle to stay in the black, his fund is now worth $11 billion and he is the largest hedge-fund manager in the world. And he’s making money again: After sliding for years along with other hedge funds during the financial crisis, SAC Capital returned 13% last year—well above its peers.

Cohen has recovered his status as king of the industry. His firm has more than one thousand employees worldwide and manages more than $15 billion in assets under management (AUM). It continues to churn out profits while many others suffer losses or have shut down altogether because they have fallen on hard times after being hit by regulatory investigations into insider trading; some are still trying to get back off their feet after being forced into bankruptcy by regulators or investors who quit investing with them after their troubles became too much trouble for them (or both).

New rules don't stop those who want to take risks

The new laws don't stop those who want to take risks. The people who run hedge funds, for instance, are still allowed to invest in private companies and startups. They can also invest in the stock market of foreign countries—no problem. But the rest of us need a license to do any of these things now? It's like there's no room left for anyone with ambition or ingenuity on Wall Street!

Now let's look at how Cohen has responded to these changes since they were enacted: He raised $10 billion dollars from investors within three months of launching his new firm after being forced out of his old one—and then proceeded to make money hand over fist (something like 80% return year-to-date).

Conclusion

The moral of the story of Steve Cohen is that new rules don’t stop those who want to take risks. If anything, they make them more determined.