Black edge
"Steven A. Cohen is a Wall Street legend. Born into a middle class family in a decidedly upper class suburb on Long Island, he was unpopular in high school and unlucky with girls. Then he went off to Wharton, and in 1992 launched the hedge fund SAC Capital, which grew into a $15 billion empire. He cultivated an air of mystery and reclusiveness--at one point, owned the copyright to almost every picture taken of him--and also of extreme excess, building a 35,000 square foot house in Greenwich, flying to work by helicopter, and amassing one of the largest private art collections in the world. But on Wall Street, he was revered as a genius: one of the greatest traders who ever lived. That public image was shattered when SAC Capital became the target of a sprawling, seven-year criminal and SEC investigation, the largest in Wall Street history, led by an undermanned but determined group of government agents, prosecutors, and investigators. Experts in finding and using 'black edge' (inside information), SAC Capital was ultimately fined nearly $2 billion--the largest penalty in history--and shut down. But as Sheelah Kolhatkar shows, Steven Cohen was never actually put out of business. He was allowed to keep trading his own money (in 2015, he made $350 million), and can start a new hedge fund in only a few years. Though eight SAC employees were convicted or pleaded guilty to insider trading, Cohen himself walked away a free man.
Stats for nerds
3recommend
7mentions
7people
2017–2021years
43% recommend57% neutral
Mentions per year
What Hacker News says
- Here is my list:
Fiction:
* The Invisible Life of Addie LaRue by V.E. Schwab - https://www.goodreads.com/book/show/50623864-the-invisible-l...
* Shorefall (The Founders Trilogy #2) by Robert Jackson Bennett - https://www.goodreads.com/book/show/45200535-shorefall
* The Great Alone by Kristin Hannah - https://www.goodreads.com/book/show/34912895-the-great-alone
WOW, beauty and pain mixed together on canvas of Alaska.
* The Nightingale by Kristin Hannah - https://www.goodreads.com/book/show/21853621-the-nightingale
What an excellent book! It tells about hardship and sacrifices that people experienced during WW2. But considering current situation (corona virus, economy, etc.) it's 100 time better - it teach us to value simple stuff in our life (cup of coffee, laugh with friends, etc) because it may not last. Live here and now!
* The Ten Thousand Doors of January by Alix E. Harrow - https://www.goodreads.com/book/show/43521657-the-ten-thousan...
WOW, pure magic on every page!
Non-Fiction:
* Sandworm: A New Era of Cyberwar and the Hunt for the Kremlin's Most Dangerous Hackers by Andy Greenberg - https://www.goodreads.com/book/show/41436213-sandworm
Excellent book about cyber-security and Russian hacker. If you think it's not related to you, think again! Among their targets were big ports, hospitals in different countries, bank machines in Ukraine, etc. Nobody could be safe with such level of technology spread that we depend more and more each day. USA and Israel did attacks on Iran nuclear program using StuxNet (for excellent account of that check Countdown to Zero Day: Stuxnet and the Launch of the World's First Digital Weapon). But apparently not just USA and Israel can do that, China, North Korea, Russia and other countries are using hackers more than conventional weapons now - and it make sense, cheaper and less dangerous for those who initiated attacks. With coming year we'll see more and more of such issues, so read the book to be prepared to what is coming.
* Fentanyl, Inc.: How Rogue Chemists Are Creating the Deadliest Wave of the Opioid Epidemic by Ben Westhoff - https://www.goodreads.com/book/show/44643351-fentanyl-inc
Holy shit, what a ride! Drug users, China chemical producer making precursors for fentanyl (which is legal to produce in China and even government subsidy provided in form of tax cuts), Mexican cartels (main supplier to USA), Chinese gangs in Vancouver (main supplier to Canada), people who try to save kids on rave parties by supplying test kits and get kicked out and threaten to be sued.
According to this book fentanyl is more powerful and dangerous then cocaine, heroine and meth. I've never heard about it before this book, it's like an eye-opener.
* Black Edge: Inside Information, Dirty Money, and the Quest to Bring Down the Most Wanted Man on Wall Street by Sheelah Kolhatkar - https://www.goodreads.com/book/show/32284263-black-edge
The say goes "There are three verdicts: guilty, not guilty and rich". This book shows exactly this. It's better to be rich guy and end up with wrist slap (5% of his net worth - right, it's 800M, but still 5% of 16B). And scapegoat who agreed to help justice will go to jail for long time. Disgusting, but again "greed is good!"
* Capitalism in America: A History by Alan Greenspan, Adrian Wooldridge - https://www.goodreads.com/book/show/38712616-capitalism-in-a...
Excellent book about different stages of capitalism in America.
When I saw the author is Greenspan I've prepared myself to pages full of "quantitative easing" and "irrational exuberance" sentences. The book was very vivid and refreshing, excellent language and information, highly recommended.
* Range: Why Generalists Triumph in a Specialized World by David Epstein - https://www.goodreads.com/book/show/41795733-range
* Why We Sleep: Unlocking the Power of Sleep and Dreams by Matthew Walker - https://www.goodreads.com/book/show/34466963-why-we-sleep
Excellent book about sleep and all bad stuff happens to you when you don't get enough of it. Read it!
* The Ravenmaster: My Life with the Ravens at the Tower of London by Christopher Skaife - https://www.goodreads.com/book/show/37877606-the-ravenmaster
March 2018 we went to London and of course visited Tower. In it we saw some beautiful raven with pink ribbon on it's leg. Thanks to the book I know now it was one of the oldest and smartest raven in the Tower - Merlina. Likes this book a lot, quite interesting read.
* Killers of the Flower Moon: The Osage Murders and the Birth of the FBI by David Grann - https://www.goodreads.com/book/show/29496076-killers-of-the-...
First white people stole their land and moved them to some shitty place in middle-of-nowhere. And when oil was found on that land and Osage people become rich from oil leases the same white people was upset and said it's not fair. Some of them went further - they married Osage men and women and started to kill them one by one to get birthright - money for oil.
Another line of that book is how FBI became to be and their first case related to Osage killings.
I was listening to audio version, it's great they have 3 narrators: woman for Osage part, man that sounds like FBI agent (you can hear steel in his voice) and 3rd part narrated by author about his research for the book and other stuff related to it.
Highly recommended!
* Crisis in the Red Zone: The Story of the Deadliest Ebola Outbreak in History, and of the Outbreaks to Come by Richard Preston - https://www.goodreads.com/book/show/44526650-crisis-in-the-r...
With current corona-virus outbreak it's good to get some perspective on other deadly viruses such as Ebola. Did you know that 1.5 millions die annually from TB alone? How about regular flu - around 60 thousands gone last year. When was last time you worried about TB or flu? We are scared of wrong stuff, stuff they show us on TV with "Breaking News" red color frame. Read the book and get information and most important of all things - wash your hands often!
* Dopesick: Dealers, Doctors, and the Drug Company that Addicted America by Beth Macy - https://www.goodreads.com/book/show/37486540-dopesick
* Automate This: How Algorithms Came to Rule Our World by Christopher Steiner - https://www.goodreads.com/book/show/13542772-automate-this
Excellent review on how automation impact all directions of our live (investments, health, dating, education, etc) and how it'll eliminate some professions (such as pharmacist) and replace them with robots. Don't be scared yet, but read the book to find what is waiting us behind the corner. Highly recommended, bought it today on BookOutlet for $5.79 you cannot beat the price - planning to read it more times.
* The Body: A Guide for Occupants by Bill Bryson - https://www.goodreads.com/book/show/43582376-the-body
WOW, what a ride! This books covers everything from head to toes, telling you how different park of your body function and malfunction. Loved it, planning to read many more time, too much info to digest in one time. Highly recommended!
* Nomadland: Surviving America in the Twenty-First Century by Jessica Bruder - https://www.goodreads.com/book/show/38212124-nomadland
These people didn't choose to live in RVs and vans, they had no choice due to financial problems (bad investments, Evicted: Poverty and Profit in the American City, etc). The only way to survive was to hit the road - and they did it. Author has been following nomad people for 3 years on different part of USA (Amazon warehouse in Kentucky which has special program to hire campers for season load, state parks who need people to clean toilets, fill forms, sell campers' stuff, etc, down the south and up to north). It's interesting peek in life of people without home travelling across USA, trying to survive. It shows comradery of people in need, helping each other to survive when times get tough - it could be as simple as loaf of bread or complicated as bunch of mechanics help you to fix your wheels - the only stuff you have to ensure your survival.
When you live day by day sure about where you'll sleep at night or what you will eat for dinner - you don't see life of nomad people, the only way to know it is to read this kind of books - or travel and live with that people (which most of us won't do). So read the book and see other side of USA, one of the richest country in the world where some people are loaf of bread away from been broke.
* The Sun Does Shine: How I Found Life and Freedom on Death Row by Anthony Ray Hinton, Lara Love Hardin, Bryan Stevenson - https://www.goodreads.com/book/show/34964905-the-sun-does-sh...
Sometimes your only crime is been a black guy and it's enough to send you to death row.
This book resonates with couple of other books I've read recently (The Guardians, American Prison: A Reporter's Undercover Journey into the Business of Punishment, Ghettoside: A True Story of Murder in America and Evicted: Poverty and Profit in the American City). It shows that sometimes they are not even interested in truth, they just need some scapegoat to put the blame on. It's painful to read about innocent man who spent 28 years behind bar for a crime he didn't commit. On other hand I was amused by his sympathy to other people (KKK guy who claimed to his parents who taught him that way - "this black guy is my friend", organizing book club behind the bar, so you can travel at least in your dreams). This book teaches you to value precious moments of our life, cannot recommend it high enough!
* On the Clock: What Low-Wage Work Did to Me and How It Drives America Insane by Emily Guendelsberger - https://www.goodreads.com/book/show/42779084-on-the-clock
Excellent overview of current low-paid labor economy in USA (pretty sure it's the same in Canada, England - check out Hired: Six Months Undercover in Low-Wage Britain and everywhere else). She is talking not just about her experience of working for Amazon, calling center and McDonald, but about what's wrong with such low paying jobs (insecurity, level of stress, etc). She did excellent job on connecting dots from low-paid job to elevated level of stress, inability to plan your future (and how could you if you shift can be revealed less than 24 hours before it starts), level of medicine these workers can afford (never would imagine going 4 hours to pick some left-overs of antibiotic, try to fix swallowed tooth by myself, or using horse/dog/fish antibiotics because that all you can afford without medical insurance).
Another sections I liked a lot are related to how stress works on your body (fight-or-flight preparation from the body) and history of Wanda (how technology/society became to be).
I wish they make this book mandatory for kids to read in school so they would pay more attention to home works and getting into universities/colleges (I think kids just don't know what alternatives are - like flipping burgers at McDonald - may be cool when you are 16 years old, but not so cool when you are 30+ and have wife and kids to support - so swallow you pride, smile and get back to work).
Great book, highly recommended to everybody - just to get a perspective what some people going through in their life to put bread on the table. After reading that book you will look different at somebody who takes your order in McDonald, speak to you over the phone about issues or find stuff that you ordered from Amazon. These are people with their problems and troubles which we don't see, so read the book to at least get glimpse of what they are dealing with, such as customers throwing things at you or screaming over the phone.
- Some I haven't seen mentioned yet:
The Monk of Mokha - Dave Eggers; This seems to have been mostly under the radar but it was immensely entertaining and gives a look inside Yemen that is hard to come by. Probably my favorite book of the year.
Tailspin - Steven Brill; A look at how the split and interaction between business and government became so dysfunctional over the last 50 years. This topic has been covered elsewhere but I thought was done well.
Behemoth - Joshua B. Freeman; A history of (very large) factories.
Live Work Work Work Die - Corey Pein; A very cynical but funny look at life/work in Silicon Valley.
Two Sisters - Asne Seierstad; A story about 2 young Somalian immigrants to Norway who move to Syria to join ISIS.
Also: Bad Blood
Read in 2018 but published earlier: Black Edge - Sheelah Kolhatkar; The Solace of Open Spaces - Gretel Ehrlich; American Cornball - Christopher Miller
- You want to know more? Here: https://www.amazon.com/Black-Edge-Inside-Information-Wanted/...
- It was initially based on a true story described in the book "Black Edge". It just kept getting more and more outlandish once they ran out of source material.
- Black Edge is on one the largest insider trading cases ever prosecuted. There was no real hacking or advanced cyber crime (maybe just some social engineering) but was an interesting case of how some bad hedge funds operate.
There are some great books on this thread! I've read a bunch of them and going to come back for more.
- I’m not sure that it’s charitable to characterize either fund as being “built around gathering insider information and profiting”.
Raj Rajaratnam started at Needham & Co. in 1985, and worked his way up to firm president in 1991. He eventually bought the firm, and renamed it Galleon Group. If you look at the history of returns for Galleon, the most lucrative years were 1999 through 2002. Raj rode the tech bubble up, and got out before it burst. You don’t generate outsize, 90%+ returns solely on the basis of insider information.
As for SAC, for the vast majority of his career, Stephen A Cohen was a momentum trader in the style of Paul Tudor Jones. If you read the book Black Edge or watch the PBS documentary To Catch a Trader, at some point in the late 90s to early 2000s, Cohen started employing expert networks. The use of expert networks was legal at the time, and remains a grey area. Obviously, at some point Cohen crossed the line into outright insider trading.
My point for both of these examples was that both men were overwhelmingly rich by the time they got involved in insider trading. We can speculate on why they did it, but to suggest that they made their first hundred millions or billion with insider trading is inaccurate.
