Steve Cohen's $14 billion SAC Capital Advisors has been indicted by a federal grand jury in New York on criminal charges of insider trading.
SAC has been charged with four counts of securities fraud and one count of wire fraud, according to the 41-page sealed indictment, which has been posted by Reuters.
SAC subsidiaries CR Intrinsic and Sigma Capital were both charged in the indictment.
The indictment states that SAC has been charged "with criminal responsibility for insider trading offenses committed by numerous employees and made possible by institutional practices that encouraged the widespread solicitation and use of illegal inside information."
U.S. prosecutors allege that SAC engaged in the insider trading scheme from 1999 until 2010.
They are seeking the forfeiture of profits from the alleged offenses. The indictment alleges that figure is in the hundreds of millions.
"Today's indictment...is more broadly an account of a firm with zero tolerance of low returns, but seemingly questionable tolerance for bad behavior," U.S. Attorney Preet Bharara said at a press conference.
Two former SAC portfolio managers, who have been criminally charged with insider trading, have trials coming up in November.
Michael Steinberg, who worked at Sigma Capital, has been charged with using non-public information to trade in shares of tech stocks Dell and Nvidia. Former CR Intrinsic portfolio manager Mathew Martoma has been charged with using confidential drug trial information to trade in shares of pharmaceutical companies Elan and Wyeth.
In the insider trading case against Martoma, Cohen has been identified as "Portfolio Manager A". While he has been implicated, he has not been criminally charged. He isn't explicity named in today's indictment.
Late last week, the Securities and Exchange Commission civilly charged Cohen with failing to supervise the two hedge fund managers. The SEC's Enforcement Division is also seeking to bar Cohen from overseeing investor funds.
Cohen, 57, launched the Stamford-headquartered hedge fund in 1992. The hedge fund employs around 900 people globally.
"SAC has never encouraged, promoted or tolerated insider trading and takes its compliance and management obligations serioulsy," the firm said in a statement read by CNBC's Kayla Tausche.
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