Black Edge by Sheelah Kolhatkar Summary

Black Edge investigates the rise and fall of Steven Cohen’s SAC Capital, exposing widespread insider trading and Wall Street’s culture of unchecked greed. The book reveals how Cohen’s hedge fund used illegal "Black Edge" information—material nonpublic data from corporate insiders—to reap billions, and the government’s struggle to hold him accountable.

This book is ideal for finance professionals, true crime enthusiasts, and readers interested in corporate ethics. It offers a gripping narrative of white-collar crime, making it accessible to those unfamiliar with Wall Street jargon while providing nuanced insights for industry insiders.

Yes. Sheelah Kolhatkar’s investigative rigor and narrative flair make Black Edge a standout exposé of financial corruption. It was a New York Times bestseller, a finalist for the Financial Times/McKinsey Business Book of the Year, and praised for its page-turning analysis of SAC Capital’s illicit practices.

• White Edge: Publicly available data.
• Gray Edge: Questionably sourced or immaterial nonpublic details.
• Black Edge: Material nonpublic information from insiders, illegal to trade on. SAC Capital prioritized "Black Edge" for its reliability, despite legal risks.

Cohen sidestepped personal charges by maintaining plausible deniability, relying on verbal communication, and insulating himself from direct evidence. Prosecutors instead charged his firm, resulting in a $1.8 billion fine and SAC’s closure, while Cohen faced civil penalties.

Martoma, a SAC portfolio manager, orchestrated an insider trading scheme involving Alzheimer’s drug trials. His conviction highlighted the firm’s culture of pushing legal boundaries, though Cohen remained unscathed despite profiting from the trades.

The book critiques Wall Street’s shift toward high-risk, unethical strategies to outperform markets. It underscores systemic issues like lax regulation, the commodification of insider information, and the moral compromises normalized in finance.

The book was a New York Times bestseller, a finalist for the Financial Times/McKinsey Business Book of the Year, and shortlisted for the Andrew Carnegie Medal for Excellence in Nonfiction.

Kolhatkar’s experience as a hedge fund analyst and investigative journalist at The New Yorker enables sharp analysis of Wall Street’s opacity. Her dual expertise lends credibility to the book’s critique of financial industry practices.

The case spurred tighter insider trading enforcement and scrutiny of hedge funds. However, critics argue systemic change remains elusive, as top executives like Cohen continue operating through new ventures like Point72 Asset Management.

Cohen is portrayed as a micromanager who fostered a cutthroat, profit-driven culture. He incentivized analysts to procure edge-generating intel while avoiding written records, creating a "plausible deniability" shield against legal fallout.

"Black Edge" symbolizes the illegal insider information that fueled SAC’s success. The term reflects Wall Street’s ethical spectrum, where firms often blur lines between legitimate research and unlawful practices to gain competitive advantages.