He’s Wall Street’s ultimate comic-book villain – with his glowing bald head and marble eyes, he looks a little like Lex Luthor. But maybe the best comparison for famed hedge-fund shark and long-suspected insider-trading ringleader Steve Cohen is the Joker. Earlier this year, when the SEC extracted $616 million from Cohen’s fund in two regulatory settlements, he expressed his deep remorse by buying, within weeks, a $155 million Picasso and a $60 million beach house in the Hamptons, right down the road from his other Hamptons beach house, worth $18 million.

It was a big fat middle finger to the government, flipped by a man who clearly thought he was getting away with a slap on the wrist, the way every other brazen Wall Street crook in the past half-decade has done so far.

But in late July, Cohen was hit with two new major blows: a civil charge from the SEC and criminal charges filed by federal prosecutors against his firm, SAC Capital Advisors. The SEC charge, “failure to supervise,” looked at first like a relatively tame thing to lay on a suspected criminal mastermind, with a lifetime ban from the securities business being the worst possible outcome. But it was the first strike in what appears to be a surprisingly clever and aggressive government prosecution. Because the SEC filed its case through an administrative proceeding, not in civil court, Cohen will have limited rights to discovery, which would have helped him prepare his defense in any potential criminal cases.

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“A pelt is not enough,” says Dennis Kelleher of Better Markets, a group dedicated to Wall Street reform. “We need to see a pattern.”

SAC Capital has for years been the symbol of what many believe to be a rampant culture of insider trading at the periphery of Wall Street. In the main ring of the circus, bankers reaped untold billions through sophisticated crimes like the frauds of the mortgage bubble, market manipulation and other schemes, getting off in almost all cases with cost-of-doing-business fines. One study reported that JP Morgan Chase, for instance, paid an incredible $8.5 billion in fines between 2009 and 2012, which worked out to be 12 percent of its net income over that period – but the bank has so far completely avoided criminal charges.

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