Steven A. Cohen

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Steven A. Cohen
Born (1956-06-11) June 11, 1956 (age 64)
NationalityAmerican
Alma materThe Wharton School of the University of Pennsylvania
OccupationHedge fund manager
Known forFounding and leading:
S.A.C. Capital Advisors &
Point72 Asset Management
Insider Trading Record Fine $1.8bn[1]
Net worthUS$14.1 billion (February 2020)[2]
Spouse(s)
Patricia Finke
(m. 1979; div. 1990)
[3]
Alexandra Garcia
(m. 1992)
Children7[2]

Steven A. Cohen (born June 11, 1956) is an American billionaire hedge fund manager. He is the founder of hedge fund Point72 Asset Management and now-closed S.A.C. Capital Advisors, both based in Stamford, Connecticut.[4] He owns one of the world's most valuable private art collections, worth over $1 billion, which includes notable artworks such as Koons's Rabbit, Picasso's Le Rêve, and Hirst's The Physical Impossibility of Death in the Mind of Someone Living.[5][6][7] Cohen is currently a minority owner of the New York Mets of Major League Baseball, and will become majority owner pending approvals.[8]

In 2013, the Cohen-founded S.A.C. Capital Advisors pleaded guilty to insider trading and agreed to pay $1.8 billion in fines ($900 million in forfeiture and $900 million in fines) in one of the biggest criminal cases against a hedge fund. Cohen was prohibited from managing outside money for two years as part of the settlement reached in the civil case over his accountability for the scandal. The hedge fund agreed to plead guilty to wire fraud and four counts of securities fraud and to close to outside investors.[1]

Time Magazine ranked him 94th on its annual Time 100 list of most influential people in 2007.[9][10] As of February 2020, he has an estimated net worth of US$14.1 billion.[2]

Early life and education[edit]

Cohen grew up in a Jewish family in Great Neck, New York, where his father was a dress manufacturer in Manhattan's garment district, and his mother was a piano teacher.[9] He is the third of seven brothers and sisters. He took a liking to poker as a high school student, often betting his own money in tournaments, and credits the game with teaching him how "to take risks."[9] Cohen graduated from John L. Miller Great Neck North High School in 1974, where he played on the school's soccer team.[11][12]

Cohen received an economics degree from the Wharton School at the University of Pennsylvania in 1978. While in school, a friend helped him open a brokerage account with $1,000 of his tuition money.[9]

Investment career[edit]

1978―1992 Gruntal & Co.[edit]

In 1978, after graduating from Wharton, Cohen got a Wall Street job as a junior trader in the options arbitrage department at Gruntal & Co.[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[13] and eventually managed a $75 million portfolio and six traders.[9] Cohen was running his own trading group at Gruntal & Co. by 1984, and continued running it until he started his own company, SAC.[13]

Throughout the late 1980s, the Securities and Exchange Commission became suspicious that Cohen had used inside information in December 1985 when he bet that RCA and GE would merge, ahead of the announcement. The SEC called him to testify, but he refused to answer any questions, invoking his right against self-incrimination. Then, the SEC started looking into his other investments from the same period, especially those involving Brett K. Lurie.[14]

1992 Founds S.A.C. Capital Advisors[edit]

In 1992, Cohen started S.A.C. Capital Advisors with $10 million of his own money and another $10 million from outside capital. The company's name 'SAC Capital' derived from Steven A. Cohen's initials.[15]

In 2003, the New York Times wrote that "SAC is one of the biggest hedge funds and is known for frequent and rapid trading."[16] In 2006, the Wall Street Journal reported that while Cohen was once a rapid-fire trader who never held trading positions for extended periods of time, he now holds an increasing number of equities for longer periods of time.[9][10]

As of 2009, the firm managed $14 billion in equity.[17]

2012―2016 SEC Investigation[edit]

On November 20, 2012, Cohen was implicated in an alleged insider trading scandal involving an ex-SAC manager, Mathew Martoma.[18][19] The SEC brought charges against a number of other SAC employees from 2010 to 2013 with various outcomes. Martoma was convicted in 2014, in what federal prosecutors billed as the most profitable insider-trading conspiracy in history.[20] The SEC later brought a civil lawsuit against Cohen, alleging his failure to supervise Martoma and Michael Steinberg, who was a senior employee and confidant of Cohen's.[21] Cohen settled his civil case with regulators in January 2016; the agreement with the SEC prohibited Cohen from managing outside money until 2018.[21]

S.A.C. Capital Advisors "pleaded guilty to insider trading charges in 2013 and paid $1.8 billion in penalties" and was required to stop handling investments for outsiders.[15] Cohen "escaped criminal indictment himself despite being the living, breathing heart of S.A.C. Capital,"[15] but Dr. Sidney Gilman, the star prosecution witness against Martoma, testified that FBI agents told him that Cohen was the investigation's ultimate target.[22] He was featured in a January 2017 New Yorker article titled, "When The Feds Went After The Hedge-Fund Legend Steven A. Cohen".[23]

2016 Point72 Ventures[edit]

In May 2016 Cohen founded Point72 Ventures, "a venture capital fund that makes early-stage investments."[24]

Wealth[edit]

In 2016, Forbes Magazine estimated Cohen's fortune at $13 billion, ranking him the 30th richest person in the United States.[2] Cohen was dubbed "the hedge fund king" in a 2006 Wall Street Journal article. His 2005 compensation was reportedly $1 billion,[25] considerably higher than his 2001 compensation of $428 million.[13] In February 2015, Forbes listed Cohen as the highest-earning hedge fund manager in 2014.[26] In December 2013, Cohen's New York penthouse in the Bloomberg Tower was listed for sale for $98 million.[27]

Investments[edit]

Cohen is a minority owner of the New York Mets, with a 8% stake in the baseball team.[28]On August 27, 2020, news sources announced that Cohen had entered into exclusive negotiations with Fred Wilpon and Saul Katz to buy a controlling interest in the Mets.[29] On September 14, 2020, it was announced an agreement was made to give Cohen majority control of the Mets, pending approval from MLB owners[30].

Philanthropy[edit]

Trustee - Cohen serves on the board of trustees of the New York-based Robin Hood Foundation.[31]

Steven & Alexandra Cohen Foundation - Cohen and his wife Alexandra have donated to projects involved in health, education, arts and culture, and the New York community.[32] In 2014, the Cohen Foundation provided funding, via the New York University Langone Center, for the study of post-traumatic stress and traumatic brain injury.[33]

The Steven & Alexandra Cohen Foundation gave a grant in excess of $100,000 to the Bruce Museum of Arts and Science in 2014.[34]

In 2019 the foundation contributed $50 million of the more than $400 million raised for the New York Museum of Modern Art. The museum announced in 2017 that MoMA's largest contiguous gallery will be called the Steven and Alexandra Cohen Center for Special Exhibitions. Cohen is on the board of the MoMa and LA MOCA.[35]

Cohen Veterans Network - In April 2016, Cohen announced the creation and a commitment of $275 million to the Cohen Veterans Network.[36] The CVN's goal is to establish mental health centers for veterans and their families throughout the U.S.[36] The goal is the establishment of 20-25 centers by 2020.[36]

Cohen Veterans Bioscience - Cohen Veterans Bioscience, also funded by Steve Cohen, conducts research into the effects of posttraumatic stress disorder on combat veterans.[36]

Politics[edit]

In 2015, Steven Cohen and his wife, Alexandra, donated $2.25 million to a Super PAC called America Leads that supported Chris Christie's presidential candidacy.[37]

Art collection[edit]

Steve Cohen is known for often overpaying for art which seems to be part of the pleasure.[14] His art collection is reported to be worth around $1 billion.[38]

Begins collecting art - The New York Times reported that Cohen began seriously collecting art in 2000.[39] Cohen's tastes and collection began with Impressionist painters, acquiring works by Manet and Monet, after which he moved quickly into contemporary art.[39]

While he has collected works from important emerging artists such as Adam Pendleton,[40] he is most famous for collecting 'trophy' art—signature works by famous artists[41]—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.[42]

In 2006, Cohen attempted to make the most expensive art purchase in history when he offered to purchase Picasso's Le Rêve 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[43] until early November 2012, when Cohen finally acquired the painting for $150 million.[3]

In May 2019, Cohen bought Jeff Koons's Rabbit for $91.1 million,[44] the purchase was made through Robert Mnuchin, and was the most expensive work sold by a living artist at auction at the time.

Scope and housing the collection - Cohen owns or has owned artworks by Lucio Fontana, Alberto Giacometti, Willem de Kooning, Jeff Koons, Edvard Munch, Pablo Picasso, and Andy Warhol.[38][45][46][47] In 2015, he reportedly bought the world's most expensive sculpture, Alberto Giacometti's Man Pointing.[48] A 2015 estimate valued his art collection at about $1 billion.[38] Cohen is reportedly building a private museum for some of his artwork on his Greenwich property. Cohen has also placed Marc Quinn's Self, a head sculpture made of frozen blood, in the SAC lobby.[49]

Legacy and awards[edit]

In 2008, he was inducted into the Institutional Investors Alpha's Hedge Fund Manager Hall of Fame along with Alfred Jones, Bruce Kovner, David Swensen, George Soros, Jack Nash, James Simons, Julian Robertson, Kenneth Griffin, Leon Levy, Louis Bacon, Michael Steinhardt, Paul Tudor Jones and Seth Klarman.[50]

Family[edit]

Cohen has been married twice.[9] In 1979, he married Patricia Finke, a New York native from a working-class background who grew up in the Washington Heights, Manhattan neighborhood of New York City.[14] They have two children together.[14] They divorced in 1990.

In 1991 Cohen met Alexandra Garcia, a single mother of Puerto Rican descent. Garcia grew up in Washington Heights, moving there from her original home in the projects of Harlem.[14] They have four children together.[14] Before some of the children got older, Cohen and Alex lived 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] In 1998, the Cohens purchased a 35,000-square-foot (3,300 m2) home on 14 acres (57,000 m2) in Greenwich.[51][13]

Racketeering and insider trading charges[edit]

In December 2009, Cohen and his brother Donald T. Cohen were sued by Steven's ex-wife Patricia Cohen for racketeering and insider trading charges.[52] On March 30, 2011, the United States District Court in Lower Manhattan dismissed the case, but 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.[53][54][3][55] The appeals court also revived claims of racketeering and breach of fiduciary duty, while upholding the dismissal of an unjust enrichment claim.

Writing for a three-judge panel, Circuit Judge Pierre Leval said Patricia Cohen had made a “plausible” allegation that Steven Cohen had concealed the $5.5 million during negotiations on a separation agreement in 1989, which preceded the divorce. The revival of the lawsuit comes amid mounting pressure on Steven Cohen over an insider trading investigation that led to the arrest of Michael Steinberg, one of Cohen's closest confidantes at SAC Capital. SAC affiliates reached two civil insider trading settlements totaling nearly $616 million with the U.S. Securities and Exchange Commission. SAC neither admitted nor denied wrongdoing in either case.[56]

See also[edit]

References[edit]

  1. ^ a b Scannell, Kara; Foley, Stephen (November 4, 2013). "SAC to pay biggest insider fine of $1.8bn". New York, N.Y., United States: Financial Times. Nikkei. Retrieved December 4, 2019.
  2. ^ a b c d "Steve Cohen, Founder, Point72 Asset Management". United States: Forbes. Forbes Media LLC. November 1, 2019. Retrieved November 1, 2019.
  3. ^ a b c Lattman, Peter; Vogel, Carol (April 3, 2013). "Suit by Ex-Wife of SAC's Cohen Revived on Appeal" (DealBook). New York, N.Y., United States: New York Times. The New York Times Company. p. B1. Retrieved April 4, 2013.
  4. ^ Goldstein, Matthew (April 7, 2014). "SAC Capital, Meet Point72 Asset Management". New York, N.Y., United States: New York Times. The New York Times Company. p. B5. Retrieved June 12, 2019.
  5. ^ "Bloomberg - Are you a robot?". www.bloomberg.com. Retrieved May 14, 2020.
  6. ^ Levin, Bess. "Mnuchin's Dad Bought a $91 Million Rabbit for Billionaire Steve Cohen". Vanity Fair. Retrieved May 14, 2020.
  7. ^ Vogel, Carol (October 1, 2006). "Swimming With Famous Dead Sharks". The New York Times. ISSN 0362-4331. Retrieved May 14, 2020.
  8. ^ DiComo, Anthony. "Sterling Partners, Cohen agree to Mets sale". MLB.com. Retrieved September 14, 2020.
  9. ^ a b c d e f g h i Pulliam, Susan (September 16, 2006). "The Hedge-Fund King Is Getting Nervous". New York, N.Y., United States: Wall Street Journal. Dow Jones & Company Inc. p. A1. Retrieved November 16, 2009.
  10. ^ a b Fox, Justin (March 5, 2007). "Time 100 – Steven Cohen". Time Magazine. Retrieved November 16, 2009.
  11. ^ Anderson, Jenny; Lattman, Peter; Creswell, Julie (December 22, 2012). "A Fascination of Wall St., and Investigators". The New York Times. ISSN 0362-4331. Retrieved September 5, 2020.
  12. ^ "Famous Alumni / Decade: Sixties and Seventies" Check |url= value (help). http. Retrieved September 5, 2020.
  13. ^ a b c d Vickers, Marcia (July 21, 2003). "The Most Powerful Trader on Wall Street You've Never Heard Of". Bloomberg Businessweek. Bloomberg L.P. Retrieved July 25, 2006.
  14. ^ a b c d e f Fishman, Steve; Dangremond, Sam (March 26, 2010). "Divorced, Never Separated". New York, N.Y., United States: New York Magazine. New York Media LLC. Retrieved April 21, 2012.
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  16. ^ Morgensonjan, Gretchen (January 15, 2003). "Wall St. Analyst and Husband Under Scrutiny". United States: New York Times. The New York Times Company. p. C1. Retrieved June 15, 2019.
  17. ^ Burton, Katherine; Saijel Kishan (October 11, 2009). "SAC Said to Tell Clients a Review Found No Suspicious Trading". Bloomberg.com. Retrieved November 16, 2009.
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  19. ^ Van Voris, Bob; Patricia Hurtado (November 20, 2012). "Ex-SAC Manager Martoma Charged in Record Insider Scheme". Bloomburg. Retrieved November 20, 2012.
  20. ^ McCoy, Kevin (February 6, 2014). "Martoma convicted in insider trading case". USA Today.
  21. ^ a b Viswanatha, Aruna; Chung, Juliet (January 8, 2016). "Deal Ends SEC's Pursuit of Steven Cohen". Wall Street Journal.
  22. ^ Celarier, Michael (January 24, 2014). "Gilman Testifies Cohen was real FBI target". NY Post.
  23. ^ Kolhatkar, Sheelah (January 16, 2017). "When the Feds Went After the Hedge-Fund Legend Steven A. Cohen – The New Yorker". The New Yorker. Retrieved April 10, 2017.
  24. ^ Schott, Paul (May 14, 2019). "Cohen's Point72 Ventures announces eight-figure investments" (Business). Stamford, CT, United States: Stamford Advocate. Hearst Media Services Connecticut, LLC. Retrieved June 18, 2019.
  25. ^ https://www.wsj.com/articles/SB115836320295965062
  26. ^ Vardi, Nathan (February 25, 2015). "The 25 Highest-Earning Hedge Fund Managers And Traders (2015)". United States: Forbes. Forbes Media LLC. Retrieved September 11, 2016.
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  29. ^ Diamond, Miriam Gottfried and Jared (August 29, 2020). "Steven Cohen in Exclusive Talks to Buy Majority Stake in New York Mets". Wall Street Journal. ISSN 0099-9660. Retrieved August 29, 2020.
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  33. ^ Gordon, Amanda (April 6, 2016). "Steven Cohen Pledges $275 Million to Veteran Mental Health Care" (Pursuits). United States: Bloomberg News. Bloomberg L.P. Retrieved November 2, 2019.
  34. ^ Bind, Barbara (November 9, 2014). "With new grant, Bruce Museum adds family programs". United States: Greenwich Time. Hearst Media Services Connecticut, LLC. Retrieved November 2, 2019.
  35. ^ "How New York's MoMA Raised More Than $400 Million for Its Expansion in Just Four Years".
  36. ^ a b c d Fox, Emily Jane (April 8, 2016). "Billionaire Hedge-Fund Manager Pledges $275 Million to Veteran Mental-Health Care". Vanity Fair. Condé Nast. Retrieved June 18, 2019.
  37. ^ Confessore, Nicholas (July 31, 2015). "Chris Christie 'Super PAC' Raises $11 Million From a Handful of Donors" (FirstDraft). United States: New York Times. The New York Times Company. Retrieved June 16, 2019.
  38. ^ a b c Kazakina, Katya (November 4, 2015). "Steve Cohen Is Trading Art Like Stocks". Bloomberg News. Bloomberg L.P. Retrieved May 23, 2016.
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  40. ^ Gamerman, Ellen (April 16, 2015). "Adam Pendleton: The Making of an Art-World Star" (Art). United States: Wall Street Journal. Dow Jones & Company Inc. ISSN 0099-9660. Retrieved June 15, 2019.
  41. ^ Haden-Guest, Anthony (March 9, 2005). "Top Billionaire Art Collectors". Forbes.
  42. ^ Smarthistory – Hirst's Shark: Interpreting Contemporary Art Archived November 26, 2014, at the Wayback Machine, video, Beth Harris, Sal Khan and Steven Zucker commentators, 7:49. accessed December 19, 2012
  43. ^ "My Weekend in Vegas". The Huffington Post. October 16, 2006.
  44. ^ "Mnuchin's Dad Bought a $91 Million Rabbit for Billionaire Steve Cohen". Vanity Fair. Retrieved December 8, 2019.
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  46. ^ Vogel, Carol (October 12, 2006). "Works by Johns and de Kooning Sell for $143.5 Million". The New York Times. Retrieved May 24, 2010.
  47. ^ Vogel, Carol (November 18, 2006). "Landmark De Kooning Crowns Collection". The New York Times. Retrieved May 24, 2010.
  48. ^ Smith, Emily (June 8, 2015). "Man who bought the world's most expensive sculpture revealed". Page Six.
  49. ^ "An art shark on the trading floor". The First Post. October 23, 2006. Archived from the original on November 28, 2006.
  50. ^ "Cohen, Simons, 12 Others Enter Hedge Fund Hall". Institutional Investor. Institutional Investor LLC. September 23, 2008. Retrieved June 16, 2019.
  51. ^ Edmonston, Peter; Kouwe, Zachery (November 14, 2008). "For Steven Cohen, 35,000 Square Feet Isn't Enough" (DealBook). New York, N.Y., United States: New York Times. The New York Times Company. Retrieved June 15, 2019.
  52. ^ Bray, Chad; Strasburg, Jenny (December 17, 2009). "Steven Cohen Sued by Ex-Wife". New York, N.Y., United States: Wall Street Journal. Dow Jones & Company Inc. p. C4. ISSN 0099-9660. Retrieved January 4, 2010.
  53. ^ Ahmed, Azam (March 30, 2011). "Ex-Wife's Suit Against Steven Cohen Is Dismissed" (DealBook). United States: New York Times. The New York Times Company. Retrieved April 2, 2015.
  54. ^ Vaughan, Bernard; Raymond, Nate (April 3, 2013). "SAC's Cohen must face fraud claims by ex-wife" (Business News). New York, N.Y., United States: Reuters. Thompson Reuters. Retrieved September 23, 2013.
  55. ^ Chung, Juliet (April 3, 2013). "New Divorce Fight for SAC's Cohen" (Deals & Deal Makers). New York, N.Y., United States: Wall Street Journal. Dow Jones & Company Inc. p. C3. ISSN 0099-9660. Retrieved September 23, 2013.
  56. ^ "SAC's Cohen must face fraud claims by ex-wife". www.reuters.com. April 3, 2013.

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