The Things Traders Say, the SAC Edition

Watch what you say in instant messages.

That is one of the lessons to be drawn from the case filed by federal regulators on Friday against Steven A. Cohen, who say that the billionaire hedge fund manager failed to supervise employees accused of insider trading.

Some of the most detailed pieces of evidence in the order, which was filed by the Securities and Exchange Commission, concern instant messages and e-mails sent between Mr. Cohen and employees at his firm. A number of messages are quoted in the filing, complete with Web shorthand that lends a sense of urgency.

It’s clear from the S.E.C.’s order that instant messaging was a common form of communication within Mr. Cohen’s firm, SAC Capital Advisors, allowing analysts to relay information quickly without uttering a word.

Indeed, the SAC office is “weirdly quiet,” The New York Times wrote in December. “The telephones never ring; instead, they flash.”

But what was said in that silence has now come back to haunt Mr. Cohen, with regulators seeking to bar him from overseeing investor funds.

Several of the instant messages concern trading in securities of the drug companies Elan and Wyeth. In one instance, according to the S.E.C.’s order, one analyst raised a question about what was known by Mathew Martoma, then a portfolio manager at the firm.

“[I] don’t know if [Hedge Fund Manager A] or mat [Martoma] will answer, but do you think they know something or do they have a very strong feeling,” the analyst said in an instant message.

Mr. Cohen then replied, according to the filing: “[T]ough one … i think mat is the closest to it.”

Later, the order shows, Mr. Cohen said by instant message that it “seems like mat has a lot of good relationships in this arena.”

Instant messages also convey the urgency with which Mr. Martoma apparently encouraged Mr. Cohen to sell Elan â€" and the precise moment when the communication occurred.

At 1:22:34 p.m. on July 22, 2008, Mr. Martoma was on his instant messaging service. After urging a trader to sell Elan securities, he sent Mr. Cohen an instant message that read, according to the order, “would do more today if possible.”

Mr. Cohen responded 16 seconds later. Then, the filing shows, Mr. Martoma wrote: “my sense is today - thurs are best days so if possible to do more, would do so [.]” Mr. Cohen subsequently sold more.

Federal prosecutors have since accused Mr. Martoma of making more than $276 million in a combination of illegal profits and avoided losses trading in the shares of the pharmaceutical companies. Prosecutors have built their case against Mr. Martoma by securing the cooperation of Dr. Sidney Gilman, a neurology professor who is said to have leaked to him the confidential data about the drug being jointly developed by Elan and Wyeth.

A spokesman for the hedge fund said in a statement that the S.E.C.’s case filed on Friday “has no merit,” adding that Mr. Cohen “acted appropriately at all times and will fight this charge vigorously.”