Federal regulators filed civil charges against Steven A. Cohen on Friday, accusing him of “failing to supervise†employees who face insider trading charges.
The civil action delivers a serious blow to Mr. Cohen, the billionaire owner of SAC Capital Advisors. Yet it stops short of accusing him of fraud, instead focusing on a breakdown in controls at the fund, once one of Wall Street’s best performers.
“Hedge fund managers are responsible for exercising appropriate supervision over their employees to ensure that their firms comply with the securities laws,†Andrew J. Ceresney, co-head of the S.E.C.’s enforcement division, said in a statement “After learning about red flags indicating potential insider trading by his employees, Steven Cohen allegedly failed to follow up to prevent violations of the law.â€
The action comes several months after SAC agreed to settle charges with the S.E.C., paying a record $615 million.
Federal prosecutors and the F.B.I. continue to investigate the fund.
In a statement, a spokesman for SAC argued that the S.E.C.’s case “has no merit,†adding that Mr. Cohen “acted appropriately at all times and will fight this charge vigorously.â€
