This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

SAC Case Almost Quenches My Lust For Wall Street Blood

NEW YORK (TheStreet) -- For people like me who long ago gave up hoping the criminals of Wall Street might someday get their comeuppance, the criminal case against SAC Capital Advisors offers at least a measure of satisfaction.

The case brought by U.S. Attorney Preet Bharara is likely to mean the end of SAC Capital, a multibillion dollar business organized around a principal of unfairness. That principal was that traders with an "edge" -- superior access to information, the best technology, the best everything that money can buy -- would continue amassing more money off the backs of the rest of the suckers in the stock market. While SAC's main trading floors are in Stamford, Conn., it is incorporated in the West Indies because, of course, taxes are for also for suckers like you and me.

Capital markets came about to allow businesses to raise money to finance their growth, but the traders at SAC scorn such an old-fashioned notion. Their goal was to find out when a company would miss or beat quarterly earnings so they could position themselves accordingly, and then exit the position immediately after the information became public knowledge.

SAC is far from the only firm that relies on inside tips to make a profit, but it may be the biggest and the best practitioner of this dark art. Everyone knows SAC profits from inside information, and it makes the rest of us cynical. If guys like SAC founder Steven A. Cohen can get away with flouting the law, we tell ourselves, why shouldn't we?

It is true that Cohen does not face criminal charges himself, but that could change. As Bloomberg writer Paul Barrett pointed out on Bloomberg TV Friday morning, SAC portfolio manager Matthew Martoma, who does face criminal charges, may still decide to flip. Even if he escapes prison, losing his ability to manage other people's money is a serious punishment for Cohen. The government may also be able to seize billions in assets from Cohen and SAC. He may remain very rich, but not being allowed to be a player on Wall Street is a big punishment for a guy like Cohen, whose entire identity is wrapped up in the Wall Street life.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,051.73 -48.45 -0.28%
S&P 500 1,973.63 -4.59 -0.23%
NASDAQ 4,424.7040 -7.4420 -0.17%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto
Advertising Partners

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs