Cohen remarried in 1992 and launched SAC Capital with $25 million in assets, a total that grew into the billions over the next two decades. In 2011, its main fund was up 8 percent, while other hedge funds averaged a 5 percent loss, according to Forbes.
Part of the formula for success has been high expectations, said Daniel Strachman, an industry expert who interviewed Cohen for a book on hedge funds.
“He's driven and he expects the people around him to be driven,” Strachman said.
“People who have worked there would tell you it's an intense environment where you're rewarded for success and punished for failure,” he added. “It's not an easy place to work and you wouldn't expect it to be.”
For example, prosecutors say Martoma, the alleged insider trader, got a $9 million bonus for the year the allegedly illicit trades were made.
Once secure in the realm of the super-rich, Cohen went on a modern art binge in the mid-2000s that made him the envy of other collectors.
It's estimated that Cohen spent $300 million on his collection in just five years. He purchased de Kooning's “Woman III” for more than $130 million from entertainment mogul David Geffen. A mere $8 million landed a more obscure piece by British artist Damien Hirst — a 14-foot tiger shark submerged in formaldehyde.
At auctions, Cohen became known for paying full price — and for pulling the trigger with the same cool he brought to managing his hedge fund.
“Steve is so good because he does not have his ego tied up in each trade,” longtime investor George Fox told The New York Times in 2005. “He is an anomaly in this business because he hasn't had three good years, he has had 23 good years.”
This year, Cohen's tastes turned toward baseball. He made serious run at ownership of the Los Angeles Dodgers. Though he didn't win the team, Cohen didn't completely strike out. The Mets sold him a minority share as the owners sought to recover from being duped in Bernard Madoff's Ponzi scheme.
Cohen has a philanthropic streak, too. He serves on the board of the Robin Hood Foundation, a charity targeting poverty in New York.
But Cohen has been haunted by his past. His ex-wife sued him in 2009, claiming he hid assets to avoid paying a larger divorce settlement.
The suit's most sensational allegation was that Cohen had confided to her that he made $20 million after receiving an advance tip that General Electric was set to buy RCA in 1985.
Cohen got the tip from a fellow Wharton graduate “as part of an effort to take care of one another,” the suit alleged. “They sometimes referred to their group of friends as the Wharton mafia.”
Lawyers for Cohen asked a judge to throw out the suit, saying it was filed “to harass and generate media attention against Mr. Cohen.” A judge agreed, finding the allegations were too old and unsubstantiated for the case to go forward.