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SEC Puts SAC in its Sight Over Insider Trading With a Wells Notice

“SAC Capital Advisors LP said that securities regulators have warned the hedge-fund firm it may face civil charges over the alleged insider-trading scheme that led to last week’s arrest of a former portfolio manager.

Tom Conheeney, president of SAC, told investors during a Wednesday conference call that the Securities and Exchange Commission sent the firm a so-called Wells notice last week, according to people who listened or were briefed on the call. A person familiar with the investigation said SAC has been told it is vulnerable to civil charges of securities fraud and responsibility as a “control person” for the alleged illegal trading.

People familiar with the matter said the SEC’s Wells notice didn’t include any proposed charges against the firm’s billionaire founder, Steven A. Cohen. The regulator is still investigating him and probably will defer a decision on whether to seek enforcement action against him until federal prosecutors complete their criminal probe, one person familiar with the inquiry said.”

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