Just days after the U.S. Securities and Exchange Commission charged hedge fund manager Steve Cohen with failing to prevent insider trading at his firm, federal prosecutors have also indicted SAC Capital Advisors Thursday.
The Associated Press reported that Cohen's Connecticut-based SAC Capital has been charged with wire fraud and four counts of securities fraud for allegedly allowing insider trading to go unchecked from 1999 through at least 2010. Cohen was not named a defendant in the case.
As reported by eVestment earlier this week, the SEC alleged in a statement that Cohen “ignored the red flags” from SAC portfolio managers Mathew Martoma and Michael Steinberg to execute trades regarding drugmakers Elan and Wyeth, as well as computer maker Dell, using confidential information. SAC and its hedge fund affiliates CR Instrinsic and Sigma Capital earned and avoided more than $275 million as a result of the trades.
SAC and Cohen have already informed investors that they would fight the charges, according to numerous news outlets.
Five SAC executives have also been subpoenaed to testify against SAC’s insider trading activities.
With about 1,000 employees across five offices throughout the world, SAC manages about $15 billion in assets.