Social Rejection?: Hedgie Steve Cohen Wants Out of East Hampton

The world’s most infamous trader wants to get out of East Hampton, NY. Yesterday I reported for the New York Observer that Stevie Cohen, of SAC Capital, is trying to broker a private deal to sell a $60 million ocean front home he bought less than a year ago. His reasoning, according to a person on the deal, is East Hampton is ‘too Jewish’ and he has instructed people to start looking for another home in other Hampton enclaves.

This one real estate transaction has fueled a social media debate about what he’s really doing. Having lived and worked among Cohen-ites and his SAC Captial traders for the last decade out in Connecticut’s gold coast I don’t think his comment is a signal of anything anti-Jewish. Instead I believe it shows his social network could be failing since the hedge fund he founded plead guilty to supporting a culture of massive inside trading.

Cohen paid the highest fees to broker dealers who moved his trades for over a decade but according to people who worked with him, starting from his early days a Gruntal & Co, they hated him because of the way he did business. I’ve been told stories of dealers at Lehman leaking other funds trade volume to Cohen and Cohen even funding smaller hedge funds to use them to create liquidity when he wanted to short a stock. The years of alleged cheating to beat the markets has left sour grapes in mouth of many on Wall Street. And now that he’s shutting down his large hedge fund his volume of fee paying to The Street will shrink. This could mean people aren’t as motivated to play friendly with the Cohens in their social time.

Stevie Cohen Family photo

Before we ran the story about why he wants to sell his East Hampton home I had multiple conversations with Cohen’s outside pressman (aka his block and tackle Flack) Jonathan Gashalter about what was going to be reported and he expressed anger at the idea we’d print the ‘too Jewish’ comment. He also would not go on the record to say neither house is up for sale before he went to print. No one knows what’s really in this hedgie’s mind when he said it and I’m sure Cohen never thought it would get repeated. Stevie Cohen has gotten stories held or changed for years through Gashalter but as the market ( and my peers in the media) are apparently waking up to how he operates it was refreshing to see the New York Observer stand by the news report and my reporting.

The news on anything Cohen, or what his family, does isn’t going to stop. Nick Verbitsky, director of Frontline’s new blockbuster film ‘To Catch a Trader’, told me the FBI even admitted that have three stock trades they are still investigating that could lead to criminal charges against Cohen. It’s my understanding one of them has a whistleblower willing to flip on Cohen; which is something we have yet to see in the DOJ’s seven plus years of trying to nail Cohen for inside trading.

Even if the DOJ is never able to get a criminal charge against Stevie, how the markets and his social network respond to what ‘they think’ he’s done is much more of a barometer for how The Street will or won’t police itself.

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Comments

  1. Nick Dean says:

    He lives in America, which is in the West, and he lives right now! Within those parameters there’s no escape from ‘too Jewish’, the Jews run it all!

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