Steven A. Cohen

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For other persons with a similar name, see Stephen Cohen.
Steven A. Cohen
Born (1956-06-11) June 11, 1956 (age 58)
Great Neck, New York, U.S.
Residence Greenwich, Connecticut, U.S.[1]
Nationality American
Alma mater Wharton School, University of Pennsylvania (B.S.)[1]
Occupation Founder, SAC Capital Advisors
Hedge fund manager
Salary $600 million (2011)
Net worth Increase $11.1 billion (May 2014)[1]
Spouse(s) Patricia Finke (m. 1979; div. 1990)
Alexandra Garcia (m. 1992)
Children 7[1]

Steven A. Cohen (born June 11, 1956) is an American hedge fund manager. He is the founder of SAC Capital Advisors, a Stamford, Connecticut-based hedge fund focusing primarily on equity market strategies.

He has an estimated net worth of $11.1 billion as of May 2014, ranked by Forbes as the 106th richest man in the world.[1][2] Cohen is 35th overall in the U.S.[3] In November 2012, he began to be implicated in a large criminal insider trading scandal. In July 2013, SAC was charged by the Securities and Exchange Commission with failing to prevent insider trading.[4][5] In November 2013, SAC Capital agreed to plead guilty, stop managing funds for outsiders, and pay a $1.2 billion fine.[6]

Early life[edit]

Cohen grew up in a Jewish family[7][8] in Great Neck, New York, where his father was a dress manufacturer in Manhattan's garment district, and his mother was a part-time piano teacher.[9] He took a liking to poker as a high school student, often betting his own money in tournaments. Cohen credits the game with teaching him "how to take risks."[9] Cohen received an economics degree from the Wharton School at the University of Pennsylvania in 1978. He was a brother of Zeta Beta Tau fraternity, Theta Chapter.[10][11] While in school, a friend helped him open a brokerage account with $1,000 of his tuition money.[9]

Business[edit]

After Wharton, Cohen got a Wall Street job as a junior trader in the options arbitrage department at Gruntal & Co. in 1978, where he eventually managed a $75 million portfolio and six traders.[9]

His first day on the job at Gruntal & Co., he made an $8,000 profit. He would eventually go on to make the company around $100,000 a day.[10] Cohen was running his own trading group at Gruntal by 1984, and continued running it until he started his own company, SAC.[10]

In 1992, Cohen started SAC Capital Partners with $20 million of his own money; today the firm manages $14 billion in equity.[12] Originally known as a rapid-fire trader who never held trading positions for extended periods of time, Cohen now holds an increasing number of equities for longer periods of time.[9][13]

Cohen was quoted as saying "I always tell my traders that they would've loved the 1990s because it was a fairly easy time to make money." [14]

Cohen is one of the minority owners of the New York Mets, holding a 4% stake in the baseball team.

Wealth[edit]

Forbes Magazine estimates Cohen's fortune at $10.3 billion in September 2014, ranking him the 35th richest man in the United States.[15]

In 1998, the Cohen family purchased a 35,000 square feet (3,300 m2) home on 14 acres (57,000 m2) in Greenwich, Connecticut.[16]

His 2005 compensation was reportedly $1 billion,[17] considerably higher than his 2004 compensation ($450 million),[18] 2001 compensation ($428 million),[10] and 2003 compensation ($350 million).[19]

In addition, Cohen owns 7% of search engine Baidu[20] and owns 5% of SSD design firm OCZ Technology.[21]

In February 2013 Forbes listed Cohen as one of the 40 Highest-Earning hedge fund managers.[22] In December 2013, Cohen's New York penthouse in the highly coveted Bloomberg Tower was listed for sale for 98 million dollars.[23]

Controversy[edit]

On November 20, 2012, according to The Wall Street Journal, Cohen was implicated in an alleged insider trading scandal involving an ex-SAC manager, Mathew Martoma. Cohen was not directly named in an indictment released in New York, but was referred to as "Portfolio Manager A" "according to people familiar with the matter."[24][25] Reuters reported that Cohen "personally signed off on" the trades that are being investigated, but that "experts said prosecutors lack proof that Cohen knew the trades ... were based on inside information".[26] A SAC spokesman later stated that “Mr. Cohen and SAC are confident that they have acted appropriately and will continue to cooperate with the government’s inquiry,” according to The Wall Street Journal.[27]

Five former SAC employees have been implicated in insider trading deals by prosecutors and three have confessed. Another three former SAC traders have been charged with illegal trading after they left SAC and two have pleaded guilty. SAC’s culture has been described as "high-stress, pressure-packed... (and) ruthless". The firm relentlessly digs "for information about publicly traded companies to form a 'mosaic,' building a complete picture of the company’s prospects that gives the firm an edge over other investors."[4]

Personal life[edit]

Cohen has been married twice:[9][28]

  • In 1979, he married Patricia Finke,[29] a New York native from a working-class background who grew up in the Washington Heights, Manhattan neighborhood of New York City. They had two children together. They divorced in 1990.[30][31]
  • In 1992, he married Alexandra Garcia, a working single mom of Puerto Rican Catholic descent who also grew up in Washington Heights. They have four children together.[8][32] They live in Greenwich, Connecticut with their seven children (their four children along with Alexandra's prior child and his two children with his first wife, Patricia).[9][28]

Cohen serves on the Board of Trustees of Brown University and the New York-based Robin Hood Foundation.[11][33][34]

In 1999, the publicity-shy[9][10] trader granted one of his first on-the record interviews to Daniel Strachman for his book Getting Started In Hedge Funds (Wiley 2000).

In December 2009, Steven A. Cohen and his brother Donald T. Cohen were sued by Steven's ex-wife Patricia Cohen for racketeering and insider trading charges.[35] On March 30, 2011, the United States District Court in Lower Manhattan dismissed the case, saying Ms. Cohen’s claims amounted to little more than speculation and rumor.[36]

On April 3, 2013, the 2nd U.S. Circuit Court of Appeals in New York said a lower court had erred in dismissing fraud-based claims by his former spouse and revived the lawsuit.[37] It also revived claims of racketeering and breach of fiduciary duty, while upholding the dismissal of an unjust enrichment claim.[38][39][40]

On February 6, 2014, former SAC Capital portfolio manager Mathew Martoma was found guilty in what federal prosecutors billed as the most profitable insider-trading conspiracy in history.[41] He becomes the eighth present or former SAC Capital employee found guilty on insider-trading charges. The hedge fund itself pleaded guilty to similar criminal charges in a $1.8 billion November settlement that requires it to stop handling investments for outsiders. Cohen hasn't been charged. But Dr. Sidney Gilman, the star prosecution witness against Martoma, testified that FBI agents told him Cohen was the investigation's ultimate target.

Art collector[edit]

Picasso's famed La Reve, which Stephen Cohen purchased from Steve Wynn for US$150 million in 2012.

Cohen began collecting art in 2000, and has since become a prominent collector, appearing on Art News magazine's "Top 10" list of biggest-spending art collectors around the world each year since 2002,[42] and Forbes magazine's "Top Billionaire Art Collectors" list in 2005.[43] To date, Cohen has bought around $700 million worth of artwork;[44] in 2003, the New York Times reported that in a five-year period, Cohen spent 20% of his income at art auctions.[45]

Cohen owns between 4.7% and 5.9% of the stock of Sotheby's auction house, which has been described as a "significant stake."[46]

He is reportedly building a private museum for some of his artwork on his Greenwich property.[47] In the winter of 2005, it became known that in 1999 Cohen had bought Edvard Munch's Madonna. Reportedly, this was for $11.5 million.

His tastes in collecting changed quickly from Impressionist painters to contemporary art. He also collects 'trophy' art—signature works by famous artists[43][48]—including a Pollock drip painting from David Geffen for $52 million and Damien Hirst's The Physical Impossibility of Death in the Mind of Someone Living, a piece that the artist had bought back from Charles Saatchi for $8 million.[49] In the last two years, he reportedly paid $25 million each for a Warhol and a Picasso. He is a major patron of the Marianne Boesky art gallery.

He has purchased some unusual art works. In 2006, Cohen remarked that repairing his suspended shark artwork, a cost estimated to be a minimum of $100,000, was an "inconsequential" expense. Since the shark itself is over 10 years old, it has begun to rot and requires replacement.[50] The replacement shark has already been caught;[51] once the exhibit is fixed, Cohen will have it moved into his SAC office.[44] Cohen has also placed Marc Quinn's Self, a head sculpture made of frozen blood, in the SAC lobby.[44]

In addition, in 2006 Cohen bought a landscape entitled "Police Gazette” by artist Willem de Kooning for $63.5 million from David Geffen.[52] Also in 2006, Cohen attempted to make the most expensive art purchase in history when he offered to purchase Picasso's Le Reve from casino mogul Steve Wynn for $139 million. Just days before the painting was to be transported to Cohen, Wynn, who suffers from poor vision due to retinitis pigmentosa, accidentally thrust his elbow through the painting while showing it to a group of acquaintances inside of his office at Wynn Las Vegas. The purchase was canceled, and Wynn still held the painting[53] until early November, 2012, when Cohen finally acquired the painting for $150 million.[54] In November 2006, Cohen purchased another Willem de Kooning painting, Woman III, from David Geffen for $137.5 million.[55]

Recognition[edit]

Dubbed "the hedge fund king" in a 2006 Wall Street Journal article, Time Magazine ranked him 94th in 2007 on its annual Time 100 list of most influential people.[9][13] In 2011 he was included in the 50 Most Influential ranking of Bloomberg Markets Magazine.[56]

References[edit]

  1. ^ a b c d e [1] Forbes.com. Retrieved September 2011.
  2. ^ Mason, Melvin. "Greenwich Home to Billionaires on Forbes List". The Greenwich Daily Voice. Retrieved July 26, 2012. 
  3. ^ Weizel, Richard. "Eight County Billionaires Make Forbes Richest List". The Norwalk Daily Voice. Retrieved July 26, 2012. 
  4. ^ a b Lattman, Peter (November 26, 2012). "New Breed of SAC Capital Hire Is at Center of Insider Trading Case". The New York Times. Retrieved November 26, 2012. 
  5. ^ "SEC charges SAC Capital's Steven A. Cohen for failing to prevent insider trading by employees". CNBC. 19 July 2013. Retrieved 19 July 2013. 
  6. ^ Lattman, Peter; Protess, Ben (November 4, 2013). "SAC Capital Agrees to Plead Guilty to Insider Trading". The New York Times/Dealbook. Retrieved November 6, 2013. 
  7. ^ JTA: "Jewish, Republican, pro-gay rights" By Ron Kampeas May 14, 2011
  8. ^ a b The Tablet: "Tribal Allegiance: A Brooklyn rabbi thought he could swindle hedge-fund king Steven Cohen by playing on his Judaism. It was a bad bet." By Allison Hoffman December 16, 2010
  9. ^ a b c d e f g h i Pulliam, Susan (September 16, 2006). "The Hedge Fund King is Getting Nervous". The Wall Street Journal. Retrieved November 16, 2009. 
  10. ^ a b c d e [2] Vickers, Marcia, "The Most Powerful Trader on Wall Street You've Never Heard Of" cover story, Business Week, July 21, 2003, Retrieved July 25, 2006
  11. ^ a b "New Brown fellows, trustees, and officers announced". Today at Brown. Brown University. May 28, 2008. Retrieved November 16, 2009. 
  12. ^ Burton, Katherine; Saijel Kishan (October 11, 2009). "SAC Said to Tell Clients a Review Found No Suspicious Trading". Bloomberg.com. Retrieved November 16, 2009. 
  13. ^ a b Fox, Justin (March 5, 2007). "Time 100 - Steven Cohen". Time Magazine. Retrieved November 16, 2009. 
  14. ^ http://www.brainyquote.com/quotes/authors/s/steven_a_cohen.html#aJKlGf00QFmuwrB3.99
  15. ^ "#121 Steve Cohen". Forbes. September 24, 2014. 
  16. ^ DealBook - New York Times - For Steven Cohen, 35,000 Square Feet Isn’t Enough
  17. ^ [3] The Wall Street Journal
  18. ^ Ryan Money Blog » Venture Capital
  19. ^ [4]
  20. ^ Net stocks close lower as Monster sinks on options probe - MarketWatch
  21. ^ [5]
  22. ^ Vardi, Nathan (February 26, 2013), "The 40 Highest-Earning Hedge Fund Managers & Traders 2013", Forbes 
  23. ^ Matt Chaban (December 31, 2013). "Stephen A. Cohen cuts the price on his $117M duplex in the Bloomberg Tower". Daily News (New York). 
  24. ^ Bray, Chad (20 November 2012). "Steven Cohen Implicated in Alleged Insider-Trading Scheme". Wall Street Journal. Retrieved 20 November 2012. 
  25. ^ Van Voris, Bob; Patricia Hurtado (November 20, 2012). "Ex-SAC Manager Martoma Charged in Record Insider Scheme". Bloomburg. Retrieved November 20, 2012. 
  26. ^ Flitter, Emily; Basil Katz (November 20, 2012). "U.S. charges ex-SAC manager in $276 million insider scheme". Reuters. Retrieved November 21, 2012. 
  27. ^ Jones, Ashby (November 20, 2012). "Spotlight Swings to SAC Capital, Steven Cohen". The Wall Street Journal. Retrieved November 21, 2012. 
  28. ^ a b Edmonston, Peter; Zachery Kouwe (November 14, 2008). "For Steven Cohen, 35,000 Square Feet Isn’t Enough". The New York Times. Retrieved November 9, 2009. 
  29. ^ American Law Daily: First Amended Complaint: PATRICIA COHEN, Plaintiff, STEVEN COHEN, DONALD COHEN, BRETT LURIE, EDWARD BAO, SAC CAPITAL MANAGEMENT, INC., DONALD T. COHEN C.P.A., P.A., and GRUNTAL & CO. L.L.C., Defendants filed April 5, 2010
  30. ^ New York Magazine: "Divorced, Never Separated" By Steve Fishman March 28, 2010
  31. ^ American Law Daily: "In Amended Complaint, Ex-Wife of SAC Capital's Cohen Targets New Defendants" by Brian Baxter "Patricia Cohen (née Finke) first sued her former husband..." April 6, 2010
  32. ^ Bloomberg: "Steve Cohen's Trade Secrets" February 26, 2010
  33. ^ "The Corporation of Brown University: Trustees". Brown University. February 2009. Archived from the original on June 9, 2008. Retrieved January 4, 2010. 
  34. ^ "Robin Hood Foundation - Board of Directors". The Robin Hood Foundation. Retrieved January 4, 2010. 
  35. ^ "SAC Capital's Steven Cohen Sued For Racketeering By Ex-Wife". The Wall Street Journal. December 16, 2009. Retrieved January 4, 2010. [dead link]
  36. ^ Ex-Wife’s Suit Against Steven Cohen Is Dismissed March 30, 2011
  37. ^ "SAC's Cohen must face fraud claims by ex-wife". Reuters. April 3, 2013. 
  38. ^ Lattman, Peter; Vogel, Carol (April 3, 2013). "Suit by Ex-Wife of SAC's Cohen Revived on Appeal". The New York Times. 
  39. ^ Chung, Juliet (April 3, 2013). "New Divorce Fight for SAC's Cohen". The Wall Street Journal. 
  40. ^ Juliet Chung (April 3, 2013). "Court revives lawsuit against SAC’s Cohen". MarketWatch. 
  41. ^ McCoy, Kevin (February 6, 2014). "Martoma convicted in insider trading case". USA Today. 
  42. ^ [6] "Top 10" article, Art News magazine, Summer 2006 issue; also see the "Past Issues" section, Summer 2005, Summer 2004, Summer 2003, Summer 2002, Retrieved July 25, 2006
  43. ^ a b [7] Haden-Guest, Anthony, "Top Billionaire Art Collectors," Web page, Forbes magazine Web site, March 8, 2005, Retrieved July 25, 2006
  44. ^ a b c http://www.thefirstpost.co.uk/index.php?menuID=2&subID=1026&p=2
  45. ^ http://www.safran-arts.com/42day/art/art4mar/art0303.html
  46. ^ Marion Maneker, "Steven Cohen Buys Significant Sotheby's Stake," Art Market Monitor, March 6, 2009
  47. ^ http://www.artnet.com/magazineus/news/artnetnews/artnetnews10-26-06.asp
  48. ^ Haden-Guest, Anthony (March 9, 2005). "Top Billionaire Art Collectors - Forbes.com". Forbes. 
  49. ^ Smarthistory - Hirst's Shark: Interpreting Contemporary Art, video, Beth Harris, Sal Khan and Steven Zucker commentators, 7:49. accessed December 19, 2012
  50. ^ http://www.dallasnews.com/sharedcontent/dws/ent/stories/DN-hirst_1002gl.ART.State.Edition1.3e4aa3b.html
  51. ^ http://www.brown.edu/Students/INDY/cms/content/view/305/35/
  52. ^ Vogel, Carol (October 12, 2006). "Works by Johns and de Kooning Sell for $143.5 Million". The New York Times. Retrieved May 24, 2010. 
  53. ^ Nora Ephron: My Weekend in Vegas - Politics on The Huffington Post
  54. ^ Peter Lattman and Carol Vogel (3 April 2013). "Suit by Ex-Wife of SAC’s Cohen Revived on Appeal". The New York Times. 
  55. ^ Vogel, Carol (November 18, 2006). "Landmark De Kooning Crowns Collection". The New York Times. Retrieved May 24, 2010. 
  56. ^ Dieterich, Robert S. (September 7, 2011). "Most Influential 50 in Global Finance List: Bloomberg Markets". Bloomberg Businessweek. 

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