Steve Cohen: Great American Hedge Fund Investor or Great Ame

Despite the highly-publicized recent arrest of two former employees of the Steve Cohen-led SAC Capital Advisors, as well as federal regulators' wider insider trading investigation, "some people inside and outside the $1.9 trillion hedge fund industry are whispering that U.S. authorities, who have spent at least four years looking for evidence of wrongful trading at SAC Capital, may come up as empty-handed as Captain Ahab did in his hunt for the great white whale Moby Dick."

In a "special report" on the Feds' hunt for Steve, Reuters adds, "What has complicated the matter ... is the fact that the SAC Capital of today is very different from the high-flying fund of 10 years ago. Back then, it was renowned for an anything-goes trading culture that routinely produced spectacular annual returns of 50 percent or greater. Nowadays, Cohen's shop still outperforms most hedge funds, but it no longer ranks at the top of the pack in terms of performance."

Will the Feds ever land the great Steve Cohen?

If the appetite for Cohen's financial advice is any indication, the answer is a huge no.

Even amid the Feds' seemingly neverending search for wrondoing inside the SAC empire, investors have been handing over money to Steve and company. In fact, in the past two years alone, SAC Capital has collected $2 billion in new inflows.

(Reuters)

(Related: Career Guide to Insider Trading, Chapter 18: To Rat or Not To Rat)