Four senior executives of the hedge fund SAC Capital Advisors have received subpoenas to testify before a grand jury as part of the government's intensifying investigation into insider trading at the firm, according to people briefed on the case.
The executives were issued subpoenas last week, along with the one served on Steven A. Cohen, the owner of SAC. The executives are Thomas Conheeney, the firm's president; Solomon Kumin, its chief operating officer; Steven Kessler, chief compliance officer; and Phillip Villhauer, the head of trading.
The fresh round of subpoenas, which also included requests for additional documents and trading records, angered officials at SAC, which had been fully cooperating in the multiyear inquiry. As a result of the government's new set of demands, the fund decided to take a more combative stance, and on May 17 informed its investors that it was no longer fully cooperating with the investigation.
Lawyers have advised Mr. Cohen against testifying before a grand jury and subjecting himself to unlimited questioning on virtually any topic. Instead, he is expected to assert his constitutional right against self-incrimination, lawyers briefed on the case said. Mr. Cohen, who last year gave testimony to federal securities regulators as part of a civil insider trading case, has not been accused of any wrongdoing.
It was unclear whether Mr. Cohen's executive team would also refuse to testify.
“We don't think it is unusual that in this investigation the government would interview our senior executives about how the firm operates,†said Jonathan Gasthalter, an SAC spokesman.
The Wall Street Journal earlier reported the names of the SAC executives.
Prosecutors are pressing their case against SAC after about six years of investigating the firm's trading practices. The investigation has yielded four guilty pleas from former SAC traders; at least five other former employees have been tied to insider trading while at the firm. Earlier this year, SAC agreed to pay a $616 million penalty to resolve two civil insider trading actions brought against the firm related to questionable trading in pharmaceutical and technology stocks.
The government's new requests indicated that prosecutors were stepping up their efforts to build a case against the fund itself. Typically, a grand jury hears testimony and reviews evidence before handing up an indictment.
However, the grand jury subpoenas delivered to Mr. Cohen and the other four executives suggested that they were not targets of the investigation, as Justice Department guidelines discourage prosecutors from seeking testimony from individuals they are seeking to charge.
The requested testimony, however, could relate to potential charges against the firm connected to trades made in July 2008 in the shares of the drug makers Elan and Wyeth. Prosecutors have already criminally charged Mathew Martoma, a former portfolio manager at SAC, with helping the fund gain profits and avoid losses of $276 million by corrupting a doctor into giving him secret data about clinical trials being conducted by the two companies.
Because of the five-year deadline to file securities fraud charges, prosecutors have until mid-July to bring a case against the firm related to those trades.
Mr. Villhauer, the head of trading at SAC, played a major role in executing those trades, as did Mr. Cohen, according to court filings. Neither of them have been charged with any wrongdoing, nor have they been accused of possessing the confidential information when making the trades.
Mr. Conheeney, the president, is one of SAC's longest-serving employees, and along with Mr. Kumin handles much of its day-to-day operations so Mr. Cohen can focus on trading. They have helped drive SAC's growth from a small hedge fund with a few dozen traders based in Stamford, Conn., to a global investment firm with more than 1,000 employees and offices around the world.
As head of SAC's compliance department, Mr. Kessler oversees the firm's internal regulatory regime, which seeks to ensure that the fund complies with federal securities laws and other trading rules. He joined SAC in 2005 from the legal department of Goldman Sachs.
In recent months, Mr. Kessler has been among the SAC executives who have tried to reassure the firm's concerned investors. Already this year, investors have asked for $1.7 billion back from the $15 billion fund. (Mr. Cohen's fortune accounts for roughly $9 billion of the total.) In client presentations and conference calls, Mr. Kessler and his colleagues have emphasized that despite its central role in the government's insider trading investigation, the firm has a strong culture of compliance and some of the hedge fund industry's best practices in this area.
SAC is steeling itself for additional withdrawal requests from its investors before a June 3 deadline.
A version of this article appeared in print on 05/24/2013, on page B3 of the NewYork edition with the headline: 4 SAC Executives Subpoenaed in Insider Trading Inquiry.