Here is a tip for the super-wealthy: Do not build a ludicrously large mansion if you may someday be accused of racketeering. This mansion will change from a symbol of your stupid wealth to a symbol of your outright stupidity.
The house that reclusive billionaire trader Steven A. Cohen built is 35,000 square-feet. Well, maybe 36,000 now: Last year, Cohen applied for a permit to add 1,000 more. This act of hubris must have angered the gods, because he's in trouble now.
(Cohen's Greenwich, Conn. mansion as it might look to a vengeful god)
The Times is reporting today that Cohen's ex-wife, Patricia, has filed a lawsuit against him. In it, she claims he scammed millions of dollars during their 1988 divorce by hiding money from her—and the IRS—in shady real-estate deals. The suit also accuses Cohen of insider trading. According to the Times Dealbook blog:
She claims in her suit that in 1985, while they were married, Mr. Cohen confessed to her that he received inside information on the takeover of RCA by General Electric. When she asked him if trading on such information would be illegal, Mr. Cohen said that that he knew that the source was a former classmate of his from Wharton. But he obtained the information from a mutual friend, so he was not involved in insider trading.
Also, just sleazy finance-related behavior in general: After Patricia made almost a million dollars through real-estate deals, she claims Steven took the money, placed it in an account in his name and told her she couldn't touch it. This thing is going to be messy. Patricia Cohen's lawyer told the Times, "What I look forward to most is the day when Steve Cohen has to face 12 people on a jury and have to answer for what he did to his former wife." Damn.
And the case will seriously compound Cohen's other recent troubles: He and his company, SAC Capital Advisors, are being eyed by feared FBI investigator B.J. Kang in the case of an insider trading ring involving ex-SAC employees. (Which also encompasses the charming story of Andrew Tong—a trader allegedly forced to perform oral sex on his boss.)
Who knows how Cohen will fare in the lawsuit or the investigation. One thing's for sure: Behind the walls of his huge mansion, Cohen has got to be fuming about the attention this is bringing him. This man is private to the point of neurosis: According to Reuters, "Cohen is so intensely private he hates being photographed and has even bought the rights to some pictures taken by freelancers."
This description of his house from a lengthy 2003 BusinessWeek profile completes the image of the shut-in billionaire who values his privacy as much as he does his wealth:
It is completely obscured from the street by a roughly 12-foot-high wall. Cohen is so secretive that he installed an extensive alarm system that beeps whenever someone walks into a room or out, say acquaintances.
The grounds, which some neighbors call Chelsea Piers — after the mammoth Manhattan sports complex on the Hudson River — include a basketball court that becomes an ice-skating rink in winter, several golf holes, and a bubble-enclosed swimming pool. "For kids, getting invited to the Cohens is one of the most coveted invitations in Greenwich," says a neighbor.
Remember, billionaire readers: It's always those last 1,000 square feet that bring fate crashing terribly down on your head.