S.E.C. Brings Case Against 10th Former SAC Capital Employee

Federal regulators on Thursday announced the latest case to stem from the decade-long insider trading investigation into SAC Capital Advisors, taking aim at a former employee for facilitating a number of illegal trades.

Ronald N. Dennis is the 10th former employee of SAC Capital â€" the giant hedge fund run by the billionaire investor and art collector, Steven A. Cohen â€" to face insider trading charges. In settling the civil charges with the Securities and Exchange Commission, Mr. Dennis agreed to be banned from the securities industry and to pay $200,000.

The case against Mr. Dennis comes eight months after the investigation culminated with the indictment of SAC itself. After that move, a rare show of criminal force against a large company, the investigation into SAC and Mr. Cohen began to lose some momentum.

Mr. Dennis, who worked for less than two years at an arm of SAC known as CR Intrinsic before he left in 2010, was not charged criminally. In past court filings, prosecutors named him as an uncharged co-conspirator.

Some of his former SAC colleagues have faced worse fates. As SAC became synonymous with the broader insider trading investigation that consumed some of Wall Street’s biggest name hedge funds, eight current or former SAC employees have either pleaded guilty or been convicted.

“Like several others before him at SAC Capital and its affiliates, Dennis violated the insider trading laws when he exploited confidential information about public companies,” Sanjay Wadhwa, the S.E.C. official who oversaw the agency’s investigation into SAC, said in a statement. “His actions have cost him the privilege of working in the hedge fund industry ever again.”

A lawyer for Mr. Dennis and a spokesman for Mr. Cohen both declined to comment.

For years, Mr. Cohen was seen as the target of the investigation. Last year, the S.E.C. charged him with failing to supervise employees accused of insider trading. But as the cases piled up, Mr. Cohen was never charged with illegal trading himself. Federal prosecutors and the F.B.I. in Manhattan continue to pursue leads, though it its unclear whether any other criminal cases will surface.

After months of negotiating its own case, SAC agreed to plead guilty last year. The plea deal, which requires SAC to pay $1.2 billion to the government and shut its doors to outside investors, has not yet received court approval. Judge Laura Taylor Swain of Federal District Court in Manhattan is expected to rule at a hearing on April 10.

In the wake of the charges against his firm, Mr. Cohen kicked off a rebranding effort that would ultimately lead him to retire the SAC name. And now, the firm is completing the process of converting from a hedge fund to a family office that will manage mainly $9 billion of Mr. Cohen’s own money.

The firm, as part of that transition, announced this week that it would rename its flagship portfolio Point72 Asset Management. The new name is a reference to address for the firm’s Stamford, Conn. office located at 72 Cummings Point Road.

Mr. Cohen is hoping the new name and Judge Swain’s acceptance of the firm’s plea will bring to a close an investigation into accusations of insider trading that has dogged SAC for nearly 10 years.

For Mr. Dennis, who lives in Fort Worth, Texas, the S.E.C. case traced to confidential tips he received about a pair of technology companies. Mr. Dennis, who received the tips from friends at rival hedge funds, ultimately “prompted illegal trades” in the shares of Dell and Foundry. The trades, the S.E.C. said on Thursday, enabled SAC to generate more than $3 million in profits and avoided losses.

The Dell trades have long been at the center of the government’s case. The trades underpin the indictment of SAC and the charges against Michael Steinberg, the most senior SAC Capital employee to be convicted.

The tips came from Jesse Tortora, then an analyst with Diamondback Capital who has become a reoccurring figure in the insider trading investigation. Mr. Tortora â€" who is cooperating with the government and testified against Michael Steinberg â€" gleaned the inside information from another friend who was tied to a Dell insider.

Moments after one of the tidbits became public, Mr. Tortora sent an instant message to Mr. Dennis saying “your welcome.” In reply, Mr. Dennis remarked: “you da man!!! I owe you.”