Narrator: In a New York wire room, an FBI agent listens intently as a trader named Danielle Chiesi pleads with her source, hedge fund titan Raj Rajaratnam. "Raj, you better listen to me," she says, her voice a mix of urgency and conspiracy. "Please don’t fuck me on this." The tip is about Akamai Technologies, and it's pure gold—non-public information that will make them millions. This single recorded conversation was a crack in the gilded facade of Wall Street, a glimpse into a world of secret information networks where an illegal edge was the most valuable commodity. It was the beginning of a decade-long manhunt that would lead investigators to the door of the most wanted man on Wall Street: Steven A. Cohen. In her gripping work of real-life investigative journalism, Black Edge, Sheelah Kolhatkar exposes the dark underbelly of high finance, detailing the relentless government pursuit of Cohen and his powerful hedge fund, SAC Capital.

Narrator: Steven Cohen’s journey from a middle-class kid on Long Island to a Wall Street legend was fueled by an obsessive drive and a preternatural talent for trading. His early days were marked by a disdain for conventional work; he learned more about risk and reward from high-stakes poker games in high school than from any textbook. This instinct served him well at Gruntal & Co., a small brokerage firm where, on his very first day in 1978, he made an $8,000 profit. His boss, Ronald Aizer, was stunned, later remarking, "I never saw talent like that. It was just staring at you."

Cohen’s ambition quickly outgrew Gruntal. In 1992, he founded SAC Capital, a hedge fund built in his own image: aggressive, relentless, and obsessed with gaining an "edge." He hired traders who were risk-takers, often asking in interviews, "Tell me some of the riskiest things you’ve ever done in your life." The culture at SAC was a high-pressure crucible where performance was everything. Traders were expected to generate profitable ideas constantly, and the pressure to find an informational advantage was immense. This environment blurred the lines between diligent research, or "white edge," and something far more dubious: "black edge," or illegal inside information.

Narrator: As SAC’s influence grew, so did its demands on Wall Street. The firm became one of the biggest clients for major banks, and with that power came an expectation of preferential treatment. A Goldman Sachs salesman explained the unwritten rule to his colleagues: "If you change a penny or two on your estimates, you call SAC first." This created a system where SAC often received crucial information before the rest of the market, giving its traders an almost unbeatable advantage.

This hunger for information led to the rise of "expert networks," firms that connected hedge funds with industry insiders for consultations. While ostensibly legal, this practice created a gray area ripe for abuse. At SAC, the pressure to deliver was so intense that analysts were pushed to get "edgy, proprietary information." Michael Steinberg, one of Cohen’s top portfolio managers, explicitly told his analyst, Jon Horvath, to leverage his network to get information that would guarantee profits. This was a thinly veiled directive to obtain inside information, a practice that became systemic within a network of analysts who formed a "fight club" to swap illegal tips, hoping their performance would go up and their bosses would love them.

Narrator: For years, the FBI and the SEC struggled to penetrate the secretive world of hedge funds. That began to change with "Operation Perfect Hedge," an investigation that started with the wiretap on Raj Rajaratnam. For the first time, investigators had a direct audio feed into the casual, everyday corruption of insider trading. The evidence was undeniable and gave them the leverage they needed to "flip" lower-level players, turning them into informants.

Agents like the FBI’s B.J. Kang became masters of this tactic. In one instance, Kang and his partner confronted Ali Far, a former Galleon employee, at his home. They played him a recording of himself giving an illegal tip to Rajaratnam. Faced with the stark reality of prison time, Far agreed to cooperate, becoming an informant who provided a roadmap into the interconnected networks of insider trading. This strategy of flipping witnesses became the government's primary weapon, allowing them to slowly work their way up the food chain, with their ultimate sights set on the biggest whale of all: Steven Cohen.

Narrator: The most damning case against SAC centered on Mathew Martoma, a portfolio manager at SAC’s CR Intrinsic unit. In 2008, Martoma was betting heavily on the success of an experimental Alzheimer's drug, bapineuzumab, being developed by Elan and Wyeth. To gain an edge, he cultivated a relationship with Dr. Sidney Gilman, the 75-year-old neurologist chosen to present the final clinical trial data to the public.

Over dozens of paid consultations, Martoma pressed Gilman for details. In July 2008, just before the public announcement, Gilman secretly shared the full, disappointing trial results with Martoma. The drug had failed. Armed with this devastating "black edge," Martoma called Steven Cohen on a Sunday morning. The very next day, SAC began a massive, covert selling spree, liquidating its $700 million position in Elan and Wyeth. Not only did SAC avoid catastrophic losses, but it then shorted the stocks, making a fortune when the share prices plummeted after the public announcement. The total profit and avoided losses from this single, illegal tip amounted to a staggering $275 million—one of the most lucrative insider trades in history.

Narrator: Despite the mountain of circumstantial evidence and the conviction of several of his employees, the government struggled to land a direct blow on Steven Cohen. He was insulated, communicating through layers of subordinates, and his traders used a "conviction rating" system to pass along tips without explicitly stating their illegal nature. During his deposition with the SEC, Cohen was a master of evasion, repeatedly answering questions about the suspicious trades with a simple, "I don't recall."

In the end, prosecutors indicted the firm, SAC Capital, rather than Cohen himself. SAC pleaded guilty to insider trading and paid a record $1.8 billion fine. The SEC separately barred Cohen from managing outside money for two years. For many, this felt like a hollow victory. Cohen was never criminally charged. He converted SAC into a family office, Point72, and continued to manage his own vast fortune. In 2018, as soon as his ban expired, he was back in business, raising billions in outside capital. His purchase of Picasso’s "Le Rêve" for $155 million while under federal investigation became a symbol of his defiance and the enduring power of wealth on Wall Street.

Narrator: Black Edge reveals a chilling truth: in the highest echelons of finance, the law is often seen not as a boundary, but as another risk to be managed. The story of SAC Capital is a case study in how a culture of relentless pressure, combined with immense financial incentives, can normalize corruption on an institutional scale. The government's decade-long pursuit, while resulting in a record-breaking fine, ultimately failed to hold the man at the top criminally accountable, showcasing the profound difficulty of prosecuting the powerful and well-defended.

The book leaves us with a lingering and uncomfortable question about the nature of justice. When a firm pays a massive fine but its leader continues to thrive, has the system truly worked? It challenges us to consider whether the rules that govern the market are sufficient to contain the boundless ambition of those who have the resources to bend them.