This was an obvious conviction. Mathew Martoma and Preet Bharara are both losers though. The winner is Steven A. Cohen. Federal prosecutors have been targeting Cohen for a very long time but they failed to flip Martoma. I am surprised that Martoma didn’t cut a deal with the prosecutors.
This conviction doesn’t mean that Cohen’s strong track record is purely because of insider trading. Cohen will continue to generate strong alpha in the coming years. Since he doesn’t have to manage as much capital, his returns will probably go up. Steve Cohen’s investment strategy is very similar to what we do at Insider Monkey. Cohen takes the best ideas of fund managers in his company which is why he was able to deliver such strong returns.