But the newly imagined Steve Cohen started to mingle with the burgeoning class of Wall Street intellectuals, for whom an article of faith has been that net worth and wisdom are closely correlated. He began to accept speaking invitations at hedge-fund conferences, like the SALT Conference in Las Vegas in 2011. That year, he even jetted off to the World Economic Forum in Davos, where he dined one evening with Jean-Claude Trichet, then head of the European Central Bank—though he kept calling him “François.” In 2012, Cohen ventured into politics, coming out for Mitt Romney and hosting a fund-raiser at his mansion. Cohen had an Election Night dinner in Boston for the highly unofficial billionaires-against-Obama movement—along with Daniel Loeb and Paul Singer.
But perhaps the most significant sign of transformation was his pursuit of a professional baseball team. The owner of the Los Angeles Dodgers, Frank McCourt, had taken the team into bankruptcy, putting it in play. Cohen insisted that baseball work as a business, and assembled experts to pressure-test the spreadsheets. Dodger Stadium’s parking lots were a particular financial pressure point. The more he investigated, the more excited he became. “I feel like it might really suit my personality and background,” he told a friend, who added, “It might have been that thing that helped him get away from staring at the screens ten hours a day.”
With the pursuit of the Dodgers, it became clear that Cohen, who’d been feared and admired even as he stayed in his trading bunker, was ready to greet his public. “[The Dodgers are not] a philanthropy. It’s a business,” Cohen told an associate. “But it makes people happy, it entertains them, it gives them something to take their minds off their problems. I want to buy the team and make money, but it’s also good for the people of Los Angeles and baseball fans.” Cohen no longer dreaded the publicity; he was looking forward to it.
In March 2012, Cohen was declared the leading bidder in the press, reportedly in for $1.6 billion. Cohen had already begun imagining how he’d rearrange his life to suit this exciting pursuit. He planned to scale back at SAC. He would open an L.A. office so he could trade, but only part time.
He hired an architecture firm to begin to plan a renovation of the stadium. He lined up a potential team president, Arn Tellem, and a general manager, Tony La Russa.
Then, on March 28, 2012, Cohen was outbid. A consortium led by Guggenheim Partners, with Magic Johnson as front man, offered more than $2 billion, which would make it the most expensive purchase of an American sports franchise in history.
Cohen was said to have been “astounded” by the bid. He could have written a bigger check, but that didn’t make business sense. He didn’t want to be seen as a fool. Still, the outcome bothered him. “Steve was really disappointed,” said a friend. “He really wanted it.”
As the Dodgers eluded him, Bharara’s investigation was heading into the endgame. At the office, Cohen found he was doing little but damage control, which demanded a whole new skill set. “He used to spend 99 percent of his ten-hour day in front of a screen watching technicals and trading. Over the last two years, it had become half the day, then 10 percent or none,” said a colleague. Before, his office conversation had been about trades and P&L. Now he listened to people’s feelings. He kept his office door open and pulled aside portfolio managers and analysts, probing them about their concerns. He affected an Alfred E. Neuman “What, me worry?” expression. “I sleep like a baby,” he insisted, half-joking. And he tried to assure them that the worst had passed, hoping it was true.
A year later, in March 2013, he agreed to pay the SEC $616 million to settle civil charges, a record-breaking sum that he hoped would put the matter behind the company. The SEC settlement was at that point better than it could have been. The SEC didn’t require that SAC close and convert to a family office, as many had believed it would. So the hedge fund could survive; it would be smaller, but its “viability” was assured, Cohen told the staff. A June 5, 2013, memo was blunt: “We have no plans to become a family office.” As part of the SEC deal, the company didn’t have to admit wrongdoing, and Cohen blithely explained that it wasn’t culpable, even if there were a few bad apples.
Still, on the trading floor, fears persisted. Top employees didn’t know what information to trust and sometimes assumed the worst. In the office of SAC president Tom Conheeney, one portfolio manager got to Cohen. “Everyone is wondering if the firm will make it to end of year. And if they will get paid,” he said. Cohen jumped out of his seat and shouted, “I’m not closing the office! You will get paid! I guarantee it!”