Black Edge: Inside Information, Dirty Money, and the Quest to Bring Down the Most Wanted Man on Wall Street

by Sheelah Kolhatkar

The Goldman salesman’s directive reflected an important shift on Wall Street, although its most entrenched players took a long time to recognize it. The new way to command power in the financial industry was to start a hedge fund. Doing so at the right time could turn someone who might have accumulated millions over the course of a twenty-year career at Goldman Sachs or Morgan Stanley into a billionaire almost overnight. In a matter of a few years, hedge funds went from a peculiar subculture on Wall Street to the center of the industry. They were far more demanding and difficult (and almost certainly more clever) than the Fidelitys and State Streets of the world, and the Goldmans and the Morgans had to go to a lot of trouble to keep them happy. But in the end, they were paid for it. If a hedge fund that generated hundreds of millions of dollars in revenue wanted the best access to the best research or the first call, you gave it to them. Or they’d take their business elsewhere.