A former employee of SAC Capital Advisors' Chicago office, Richard Lee, was once part of an "insider trading group" at a rival hedge fund, Citadel Investment Group, according to a source familiar with the matter and court filings.

Charges filed in U.S. District Court in New York on Thursday against Steven A. Cohen's SAC Capital describe the move Lee made from a hedge fund, identified only as "Hedge Fund A" to SAC, despite a warning that Lee "was known for being part of Hedge Fund A's 'insider trading group.'"

Lee worked at Citadel and was fired in 2008, according to a spokeswoman for the firm. The spokeswoman, Katie Spring, said Lee worked as a team member in a merger arbitrage group known as Principal Strategies, which no longer exists.

A source familiar with the matter said "Hedge Fund A" is Citadel, the Chicago-based firm founded by Kenneth Griffin.

SAC closed its Chicago office at the end of 2012.

Lee agreed this week to plead guilty to securities fraud charges and to cooperate with the government's insider trading investigation.

A spokesman for SAC Capital was not immediately available for comment.

(Reporting By Emily Flitter and Katya Wachtel; Editing by Gerald E. McCormick and Grant McCool)