In the world of Wall Street, few names are as famous—or controversial—as Steve Cohen. Known for his aggressive trading style, billionaire lifestyle, and sharp instincts, Cohen built one of the most profitable hedge funds in history: SAC Capital Advisors.
Though his career was rocked by a major insider trading scandal, he reinvented himself with Point72 Asset Management, cementing his legacy as both a financial titan and the owner of the New York Mets.
This article explores Cohen’s rise, SAC’s dominance, the scandals that nearly ended his career, and his resurgence as one of Wall Street’s most powerful figures.
Early Life
-
Born in 1965 in Great Neck, New York, to a middle-class family.
-
Developed an early love of poker, which honed his risk-taking and probability skills.
-
Graduated from the Wharton School at the University of Pennsylvania in 1978.
His mix of math skills, psychology, and risk appetite prepared him for the fast-paced world of trading.
Breaking Into Wall Street
-
Started as a junior options trader at Gruntal & Co. in 1978.
-
Quickly proved himself by making $8,000 profit on his first day.
-
By the early 1980s, was generating millions for the firm daily.
-
Gained a reputation for lightning-fast decisions and aggressive short-term trading.
After 14 years, he had saved enough to launch his own fund.
Founding SAC Capital Advisors
-
Launched in 1992 with $25 million of his own money and $10 million from outside investors.
-
Named after his initials: Steven A. Cohen.
-
Headquartered in Stamford, Connecticut.
SAC became known for its intense, high-pressure culture, where traders were expected to generate profits daily.
SAC’s Investment Style
Key Features
-
High-Frequency Trading – Quick bets, sometimes holding positions for only minutes or hours.
-
Decentralized Structure – Dozens of small teams trading independently, reducing risk concentration.
-
Scalping and Arbitrage – Profiting from tiny price movements at massive scale.
-
Massive Information Network – Analysts, consultants, and industry experts feeding ideas.
-
Risk Appetite – Cohen was not afraid to take bold, multi-billion-dollar positions.
Track Record
-
Consistently returned 25–30% annually for two decades.
-
At its peak, SAC managed $15 billion and was considered one of the most powerful hedge funds in the world.
The Culture at SAC
-
Known as one of Wall Street’s most cutthroat environments.
-
Traders were given significant freedom—but also fired quickly if they failed to perform.
-
Cohen himself traded heavily, often with multiple screens in front of him, monitoring tick-by-tick moves.
-
Nicknamed “the hedge fund king” for his uncanny ability to read markets.
The Insider Trading Scandal
Despite its success, SAC was dogged by rumors that its edge came from inside information.
Investigations
-
In the mid-2000s, U.S. authorities began probing hedge funds for insider trading.
-
SAC became a prime target, with several former employees charged.
High-Profile Case: Mathew Martoma
-
SAC portfolio manager convicted of insider trading on drug trial information.
-
Generated hundreds of millions in illegal profits.
Fallout
-
In 2013, SAC Capital pled guilty to insider trading charges.
-
Paid $1.8 billion in fines—one of the largest penalties in Wall Street history.
-
Barred from managing outside investor money.
While Cohen himself was never criminally charged, the scandal nearly destroyed his empire.
Reinvention: Point72 Asset Management
-
In 2014, Cohen converted his family office into Point72 Asset Management.
-
Initially only managed his own fortune, estimated at over $10 billion.
-
In 2018, Point72 reopened to outside investors after regulatory restrictions lifted.
-
Today manages over $30 billion in assets.
Point72 continues SAC’s multi-manager structure but with stricter compliance and oversight.
Steve Cohen’s Wealth and Lifestyle
-
Estimated net worth: over $17 billion (as of mid-2020s).
-
Known for his massive art collection, featuring works by Picasso, Warhol, and Pollock.
-
Lives in palatial homes, including a mansion in Greenwich, Connecticut.
-
Owns the New York Mets, buying the MLB team in 2020 for $2.4 billion.
-
On Twitter, he has built a new image as an approachable, outspoken team owner.
Criticism and Controversy
-
Critics argue SAC’s success was built on an unfair edge from insider networks.
-
His ruthless culture led to extreme pressure on traders.
-
Even after SAC’s guilty plea, many believe Cohen escaped harsher personal accountability.
-
Seen by some as the symbol of Wall Street’s excesses.
Supporters’ View
-
Genius trader with instincts few can match.
-
Created thousands of jobs and trained a generation of traders.
-
Philanthropy: Donated hundreds of millions to healthcare, education, and veterans’ programs.
-
Reinvention shows resilience and adaptability.
Cohen’s Investment Legacy
-
Pioneering Multi-Manager Model
Inspired other hedge funds to adopt decentralized trading pods. -
Risk Management
Despite scandal, SAC and Point72 avoided catastrophic losses, unlike peers during crises. -
Talent Development
SAC alumni went on to run major hedge funds of their own. -
Cultural Impact
Inspired fictional hedge fund characters, such as Bobby Axelrod in the TV show Billions.
Lessons from Cohen’s Story
-
Success Requires Discipline: SAC’s strict risk controls allowed aggressive bets without blowing up.
-
Culture Shapes Outcomes: Pressure for constant performance can encourage both brilliance and misconduct.
-
Reputation Matters: Scandals can stain even the most successful empires.
-
Resilience Pays Off: Cohen’s comeback with Point72 shows adaptability is key in finance.
Comparison to Other Hedge Fund Titans
-
Ray Dalio (Bridgewater): Focused on macro strategies, disciplined culture.
-
Ken Griffin (Citadel): Similar multi-manager model, but avoided insider scandals.
-
George Soros (Quantum Fund): Famous for bold macro bets, like shorting the pound in 1992.
Cohen stands out for his trading instinct and resilience after scandal.
Conclusion
Steve Cohen’s hedge fund empire is a story of ambition, brilliance, scandal, and redemption. From SAC Capital’s dominance to its downfall, and from Point72’s rebirth to Mets ownership, Cohen has remained a defining figure on Wall Street.
His journey shows the double-edged nature of hedge fund success: unmatched profits can come with immense scrutiny and risk.
Whether admired as a genius trader or criticized as a symbol of excess, Cohen’s influence on modern finance is undeniable. He remains one of the most powerful—and polarizing—figures in global markets.
ALSO READ: North Korean Hackers Target Crypto Firms With Fake Jobs
