NEW YORK -- Whether it's making investments, collecting art or bidding for sports franchises, Steven A. Cohen has few rivals.
Cohen's hedge fund manages $14 billion in assets. His own net worth is more than $8 billion. He's bought Picassos, Monets and Pollocks. And he recently picked up a piece of the New York Mets.
But the good fortune of one of country's wealthiest men has come at a price: an epic legal battle with his ex-wife that offered an unwelcome look behind the scenes of his lavish lifestyle and, most recently, a brewing insider trading scandal capable of toppling his empire.
Last week, federal authorities arrested Mathew Martoma, a former portfolio manager at an affiliate of the Stamford, Conn.-based firm owned by Cohen, on charges he used illegal tips about an experimental Alzheimer's drug to net more than $276 million for his fund and others.
Court papers don't name Cohen and federal authorities won't discuss their investigation of him. But they also haven't disputed reports that Cohen is the "Hedge Fund Owner" repeatedly referenced in a criminal complaint against Martoma, marking the first time they have directly linked Cohen to a long-running probe of his firm, SAC Capital Advisors.
The papers describe how Cohen rejected the advice of his own analysts and instead bet heavily on Martoma's tips about secret data from a study of the experimental drug. After learning through Martoma in 2008 that experiments weren't going well, Cohen instructed his top trader to begin dumping stock, "and to do so in a way to not alert anyone else," the papers say.
Martoma, who denies the charges, became the fourth person associated with SAC Capital to be arrested on insider trading charges in the past four years. An SAC spokesman has said the company and Cohen are cooperating with the inquiry and "are confident that they have acted appropriately."
But in a conference call with investors Wednesday, Cohen revealed that the Securities and Exchange Commission had notified the firm that it was considering enforcement action. Cohen assured callers that the firm played by the rules.
The anxiety at SAC Capital stands in stark contrast to the more charmed aspects of Cohen's meteoric rise to the hedge fund stratosphere, putting him No. 40 on the list of richest Americans.
A native of New York's Long Island, the 56-year-old Cohen graduated with a business degree from the prestigious Wharton School at the University of Pennsylvania in 1978. He married his first wife, Patricia, a year later.
When they married, "both of us had very little money," Patricia wrote in divorce papers.
That would change dramatically as Cohen became one of the most successful traders on Wall Street. The couple had two children and lived in a 5,500-square-foot apartment on Manhattan's Upper East Side. They divorced in 1990. A year later, Patricia was back in court claiming she had been cheated by their financial settlement.
The $48,000 a year that Cohen agreed to pay in child support, his ex-wife said, fell far short of the $230,500 a year she was spending to raise them, including $100,000 for travel and $26,000 on gifts and parties. There also was a separate $16,000 bill from a psychiatrist for treatment of both her and the children, she said.
Cohen remarried in 1992 and launched SAC Capital with $25 million in assets, a total that grew into the billions over the next two decades. In 2011, its main fund was up 8 percent, while other hedge funds averaged a 5 percent loss, according to Forbes.
Part of the formula for success has been high expectations, said Daniel Strachman, an industry expert who interviewed Cohen for a book on hedge funds.
"He's driven and he expects the people around him to be driven," Strachman said.
"People who have worked there would tell you it's an intense environment where you're rewarded for success and punished for failure," he added. "It's not an easy place to work and you wouldn't expect it to be."
For example, prosecutors say Martoma, the alleged insider trader, got a $9 million bonus for the year the allegedly illicit trades were made.
Once secure in the realm of the super-rich, Cohen went on a modern art binge in the mid-2000s that made him the envy of other collectors.
It's estimated that Cohen spent $300 million on his collection in just five years. He purchased de Kooning's "Woman III" for more than $130 million from entertainment mogul David Geffen. A mere $8 million landed a more obscure piece by British artist Damien Hirst -- a 14-foot tiger shark submerged in formaldehyde.
At auctions, Cohen became known for paying full price -- and for pulling the trigger with the same cool he brought to managing his hedge fund.
"Steve is so good because he does not have his ego tied up in each trade," longtime investor George Fox told The New York Times in 2005. "He is an anomaly in this business because he hasn't had three good years, he has had 23 good years."
This year, Cohen's tastes turned toward baseball. He made serious run at ownership of the Los Angeles Dodgers. Though he didn't win the team, Cohen didn't completely strike out. The Mets sold him a minority share as the owners sought to recover from being duped in Bernard Madoff's Ponzi scheme.
Cohen has a philanthropic streak, too. He serves on the board of the Robin Hood Foundation, a charity targeting poverty in New York.
But Cohen has been haunted by his past. His ex-wife sued him in 2009, claiming he hid assets to avoid paying a larger divorce settlement.
The suit's most sensational allegation was that Cohen had confided to her that he made $20 million after receiving an advance tip that General Electric was set to buy RCA in 1985.
Cohen got the tip from a fellow Wharton graduate "as part of an effort to take care of one another," the suit alleged. "They sometimes referred to their group of friends as the Wharton mafia."
Lawyers for Cohen asked a judge to throw out the suit, saying it was filed "to harass and generate media attention against Mr. Cohen." A judge agreed, finding the allegations were too old and unsubstantiated for the case to go forward.