So begins the most glorious lede to a story ever to grace the (web) pages of Bloomberg. But let us backtrack for a second. As it is an incredibly secretive organization, even by the industry's standards, many of you probably have unanswered questions about SAC, and how it became of of the most successful hedge funds ever.
Those making educated guesses have probably assumed that the culture involves a lot of drum circles, trust-falls and talk about feelings. Also a logical assumption to make would be that traders are not judged on performance-- that would be too stressful and mean.
According to Bloomberg, not so much! Incredibly, employees at the $12 billion firm are judged on the work they do and-- just wait, you're not going to believe this-- if they lose money, are asked to leave. (I know, this is a lot to process but we're going to get through it together.)
Its founder, 54-year-old Steven A. Cohen, hires traders and gives them some SAC money to manage on their own, according to former employees. If they do well, they get more money to manage and a green light to hire analysts to help research stocks. If they do poorly, they’re out. The result is a firm composed of fiercely competitive pods, with many of the best managers eventually leaving to start their own firms, the former employees say.
And it doesn't stop there. Founder Steve Cohen-- and this is just absolutely insane-- expects these guys and girls to know shit about the stocks they're buying and selling, which is wild.
Cohen, sitting in the middle of a trading floor in Stamford, Connecticut, drives his groups hard, former employees said. One, who declined to be named, quit after working every Sunday for a whole summer. Cohen talked to his portfolio managers and analysts every Sunday, quizzing them on their stock holdings, to prepare for the coming week.
Based on these alarming revelations, Bloomberg posits, it's pretty easy to see how things can get out of hand. With these absurd ground rules* in place-- 1. work hard 2. success is rewarded and failure is not -- widespread corruption is inevitable. Anyone wondering about the events of the week need only look to The Fleece.
*Which some-- crazy people and hobos, mostly-- might say govern every single job in the corporate world