SEC might take action against SAC Capital Advisors
Steven A. Cohen's SAC Capital Advisors has received a Wells notice from the U.S. Securities and Exchange Commission, suggesting the regulator may bring civil charges of insider trading against the hedge fund firm, a person familiar with the matter said.
The $14 billion hedge fund firm held a phone call with investors on Wednesday morning to inform them of the notice, the source said.
A Wells notice indicates that SEC staff would recommend a civil enforcement action against the firm.
Cohen, who founded the firm, has not been accused of wrongdoing. He was on the telephone call on Wednesday morning, the source said.
This is the first time the government has indicated it may move against the hedge fund firm itself on insider trading, after previously accusing only former SAC employees.
Last week a fifth former SAC employee was arrested and charged with having used illegally obtained information to trade healthcare stocks Elan Corp Plc and Wyeth, which is now owned by Pfizer Inc
SAC again told investors that it would bear all legal costs in defending itself against any legal action, the source said.
(Reporting By Svea Herbst-Bayliss and Katya Wachtel; Editing by Lisa Von Ahn)