How hard are federal law enforcement officials looking at Steve Cohen and his massive hedge fund, SAC Capital, in their wide-ranging insider-trading investigation?

Hard enough to have wire-tapped conversations he had from his home telephone.

People with knowledge of the matter tell the FOX Business Network that federal law enforcement officials wire-tapped conversations Cohen had in the early stages of their insider-trading probe, sometime around 2007 when former Galleon Group chief Raj Rajaratnam became a target of the investigation.

However, the taped conversations Cohen had with government witnesses didn’t reveal any illegal activity, these people say.

Still, while it’s well known that law enforcement officials have used wire taps with great success in their crackdown on insider trading, this is the first time Cohen’s name has surfaced in this regard.

Wire-tapped conversations between Rajaratnam and government informants led to the former hedge-fund chief’s conviction last year of criminal insider-trading violations and the convictions of dozens of others in the massive probe. In October, Rajaratnam was sentenced to 11 years in jail. He is appealing the case.

All told, the government has brought 66 cases -- and won 57 convictions -- since it launched the investigation about four years ago. As the FOX Business Network was first to report, federal officials say they have five years worth of cases in the pipeline that could produce hundreds of arrests and convictions.

Neither Cohen nor SAC has been charged with either civil insider-trading violations by the Securities and Exchange Commission, or criminal conduct by the U.S. Attorney’s office. Federal law enforcement officials continue to examine suspicious trading activity at SAC Capital, and several former SAC executives have been snared in the ongoing probe, though much of their alleged illegal activity occurred while former SAC employees were working at other firms.

But people with direct knowledge of the inquiry say building a case against Cohen himself has been difficult.

A spokesman for SAC had no comment. In the past, he has said that the company is cooperating with the investigation. A spokeswoman for the U.S. Attorney's office for the Southern District of New York also had no comment.

Columbia Law School professor John Coffee says that in obtaining a court order to wire tap telephone conversations, prosecutors “must show there are no other alternatives” to obtaining information and “there is probable cause” involving potential illegal activity.

Federal law enforcement and regulatory officials have been probing suspicious trading at SAC Capital for years. The Financial Industry Regulatory Authority has referred nearly two dozen suspicious trades by SAC Capital over the past decade to other law enforcement agencies. Though no charges have been filed, many of those trades were made prior to market-moving events.

As far back as 2007, the Federal Bureau of Investigation met with Cohen’s ex-wife, Patricia, who is embroiled in a long-running legal dispute with Cohen, and who claimed that her ex-husband had engaged in insider trading during their marriage in the 1980s.

Last year, a judge dismissed Patricia Cohen’s claim that Steve Cohen hid money from her during their divorce, which occurred more than 20 years ago. She is appealing that ruling.

Her lawyer declined to comment.

Charles Gasparino joined FOX Business Network (FBN) in February 2010 as Senior Correspondent.