The media-averse billionaire Steve Cohen continues to inspire curiosity. With $9 billion in the bank, the Great Neck-born son of a dress manufacturer has succeeded beyond the wildest dreams of many, all while facing steady and highly publicized charges of wrongdoing over the past few years. Lately, things have been heating up. In March, his company SAC Capital was forced to pay over $600 million in fines. Later that month, Cohen dropped $150 million on a Picasso. In the latest turn, it appears that Cohen will avoid jail time for now while his company SAC Capital faces some serious uncertainty.
In an indictment of Cohen’s hedge fund, federal prosecutors described a criminal insider trading network “that was substantial, pervasive and on a scale without precedent in the hedge fund industry.”
But Cohen wasn’t personally charged by the U.S. Attorney’s Office.
The criminal indictment comes just one week after the SEC charged Cohen with failing to supervise employees who engaged in insider trading. The SEC is seeking to ban him from the securities industry.
Allison Hoffman wrote an incredible story for Tablet about Cohen in 2010, in a story that not only covered his impressive biography and outlined some of the allegations facing him, but also chronicled one Brooklyn rabbi’s attempt to extort Cohen for money and access.
Balkany introduced himself as the dean of a Jewish girls’ school in Brooklyn. He may as well have been calling from another planet—one governed by shtetl values dictating that Jews should accord a high degree of loyalty to each other. The rabbi claimed that, in the course of his work counseling Jewish prisoners, he had learned that the government was pressuring an inmate to give up information about Cohen, and that, as a fellow Jew, he didn’t want to see harm befall the hedge-fund manager, even though they didn’t know each other. It quickly emerged that Balkany wanted something in return—$2 million in cash for his struggling school, Bais Yaakov of Midwood, and a $2 million loan for his former yeshiva, Mesivta Torah Vodaath, one of the oldest and largest of Brooklyn’s ultra-Orthodox high schools. And one more thing: He wanted a 20-minute meeting with Cohen for his son-in-law, an aspiring financier who dreamed of pitching his idol on an investment idea.
For his efforts, Balkany was rewarded with federal convictions on charges of extortion, blackmail, fraud, and making false statements to a government agent.