Steven A. Cohen Biography

Steven A. Cohen was born on June 11, 1956, in Great Neck, New York City, into a Jewish middle class family. His mother worked as a piano teacher, while his father worked at a factory that made women’s apparels. Steve was one among seven children in the family and grew up in very modest conditions.

Since his early age, he was a ‘risk-taker’ by nature and had an entrepreneurial streak within him. He gives his love for poker most of the credit for shaping up that mindset. During his high school years, he played a lot of poker, often betting a lot of money on the games. He also took part in many poker tournaments and won quite a few of them.

He pursued his high school education from the John L. Miller Great Neck North High School in New York and graduated in 1974. He was also a soccer player and played in his high school soccer team.

He enrolled into the Wharton School at the University of Pennsylvania. There, he took $1,000 from his tuition fees and with the help of a friend, he opened a brokerage account. This confidence, combined with his knowledge of the stock market, produced some favourable results for him.

He graduated in 1978 with a degree in economics. While at college, he also served as a Treasurer in the Zeta Beta Tau Fraternity for its Theta Chapter. He did not continue his academics further and right after he graduated from the Wharton School, he began working in the stock market.

His first ever job was at a company called Gruntal & Co. where he worked in the options arbitrage department as a junior trader. He joined the company in 1978 and almost immediately, he impressed the higher management of the company through his knowledge of the market as he raked in $8,000 for his company on his first day. He carried on with the success streak and within a few months, he was bringing $100,000 a day for his company.

Within a very short period of time, Steven A. Cohen had six traders and a portfolio of a whopping $75 million. He kept working at the company through the early 1980s and along with providing the company with regular huge profits he also prepared himself for an entrepreneurial career in stock trading.

He was so good at his job that he came into suspicion for insider trading. The Securities and Exchange Commission began investigating Steven when he rightly predicted a merger between two companies. He was booked by the SEC for questioning, but he decided to remain silent. This further compelled the SEC to further look into the matter and to scrutinize other investments that Steven made around the same time in the 1980s.

In the early 1990s, Steven A. Cohen gathered funds to open his own hedge fund company named S.A.C. Capital Advisors. He also used his own $10 million as capital. The company began in 1992, and started trading with $25 million in the beginning and eventually became world’s most profitable hedge fund company. The company used the ‘mosaic theory of investing’, which implies that the investments should be made after gathering stock information from different sources.

The company initially traded liquid and large cap stocks and later used the fundamental strategies to rake in profits. This slightly unusual approach, combined with Steven’s impressive knowledge of the stock market behaviour, resulted in the company making huge profits.

Soon, the company became international and opened offices in Connecticut, Chicago, Hong Kong, Singapore, Tokyo, London and many other cities. The immense success of the company also gave way to many controversies.

In 2006, a Canadian pharmaceutical company named Biovail claimed that SAC was manipulating reports on the pharma company in order to bring their stock prices down. The lawsuit was filed by Biovail on SAC, and Steven’s company defended itself by saying that the Biovail stocks were already overvalued and the falling of the stock prices was due to the regulatory investigations.

In 2009, all the cases filed by Biovail were dismissed by the court and in return, SAC sued the Canadian company to seek damages for filing a vexatious litigation against them. Biovail lost the case and ended up paying $10 million to SAC, in an agreement which was settled outside of court in 2010.

In November 2012, Steven A. Cohen was under scrutiny for his role in an alleged insider trading case against a former SAC manager named Matthew Martoma. SEC had been investigating Steven’s company for quite some time before 2012 and had run investigations on several employees of SAC, to varying results. Matthew was found guilty in 2014, and this particular insider trading scam was known as the most profitable one in the history.

Steven somehow managed to safeguard himself from indictment even though it was later revealed that he was the primary target during the frequent investigations on SAC employees.

In 2016, Steven laid the foundation of Point72 Asset Management, an L.P., which was formed to deal with SAC’s investment operations. However, owing to the charges of insider trading on the owner Steven, the company was restricted from using external investors for two years after its genesis. In 2018, the two years ban was lifted and the company was once again open to the external investors.

The company currently has over 1500 employees with its head office in Connecticut, and several other satellite offices in many parts of the world, in cities such as Hong Kong, Tokyo and London. SAC was officially out of operations in 2016.

In a 2016 edition of the Forbes Magazine, Steven A. Cohen was named as the 30th richest person in the United States, with his wealth being $13 billion. He has also been known as the ‘hedge fund King’ in the media and in 2014, he was named as the highest earning hedge fund manager in the world.

In 2012, Steven A. Harvey purchased 8% stakes in the baseball team New York Mets. In 2020, it was rumoured that Steven was in talks with the majority owners to purchase a controlling interest in the team. Over the next few months, amidst a lot of speculations, Steven eventually got a majority stake in the Mets and became the majority owner.

He is also known a philanthropist. He serves on the board of the NGO Robin Hood Foundation. Along with that, he has founded the Steven & Alexandra Cohen Foundation, which provides funds towards healthcare, education and arts.

Steven A. Cohen is also known as an art lover and is known for overpaying for the art pieces that interests him. An estimate suggests that he owns art-pieces worth $1 billion.

Steven A. Cohen married Patricia Finke in 1979. The couple had two children together, before they got divorced in 1990.

He currently lives with his second wife Alexandra Garcia, in Greenwich Connecticut. He has seven children in total, two from his first marriage, four from his second, and he is also a step-father to Alexandra’s child from her first marriage.