Thursday, March 16, 2017

"Black Edge"

The subtitle of this book by New Yorker staff writer Sheelah Kolhatkar is "Inside Information, Dirty Money, and the Quest to Bring Down the Most Wanted Man on Wall Street".  For those with interest, it is a workmanlike true story about the failed attempt to charge Steven Cohen, head of SAC Capital, with a crime.In the process, there was success in prosecuting two of his high paid helpers, and forcing a number of others out of the business.

Kolhatkar begins with the basics of the hedge fund business and for those with any knowledge that is just a price of admission, reading what helps the true laymen understand what they will be reading. The core of the book then follows the effort to hold Cohen accountable for his corrupt enterprise with FBI and SEC work during the 2009-2013 time period, and it also gives a history of SAC from its founding in 1992 until its technical shutdown in 2014 as it morphed into being the virtually unscathed Cohen's family office.

The book is a good summary of what happened, and it creates a cohesive picture in one place of what many read about in the financial press over a period of years.  It is interesting but not groundbreaking.  Much of the case was built around trades in Elan and Wyeth related to a possible Alzheimer's drug, and inside information about Dell's earnings.  They were promising avenues to indict Cohen but a few flaws, and Cohen's "best that money can buy" legal team was up to the task of defending him to the point that he never was charged, never brought to trial.

"Black Edge" gives detailed accounts of the separate trials of Matthew Martoma and Michael Steinberg, Cohen's associates that were referenced earlier as helpers.  In the greater scheme of things they are not important, they were not key players, and ending on this note makes the book somewhat less than compelling.  There is no indication of any further chinks in Cohen's armor, and little new insight into this vile man.

From this reader's perspective, "Black Edge" is an interesting but ultimately unsatisfying book as what is detailed could have been mostly been gleaned by a diligent financial press reader over the years.  With first hand knowledge here of SAC from its beginning, it can be said that even the set-up could have been much stronger.  The firm was out of line from the outset, at the edge and worse.

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