SAC Capital, one of the largest and most profitable hedge funds in Wall Street, is being indicted on criminal charges for alleged insider trading.
According to the indictment issued by federal prosecutors, employees of Steven A. Cohen’s firm took part in unlawful conduct over a 10-year period.
The Washington Post reports that SAC Capital is being charged with wire fraud and four counts of security fraud. The indictment claims that illegal trading of inside information within SAC Capital employees led to profits of hundreds of millions of dollars.
Cohen’s firm is also being accused of neglecting to check whether these activities were being done within the constraints of the law.
Although Cohen wasn’t targeted in the indictment, these charges could cause investors to pull out of SAC Capital and potentially end his $10 billion firm.