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Hedge fund giant SAC Capital threatened with fraud charges - sources

Nov 29 2012 Svea Herbst-Bayliss, Reuters

The U.S. government is threatening to file civil securities fraud charges against SAC Capital Advisors and is tightening the regulatory screws around Steven A. Cohen, the $14 billion hedge fund's founder and one of the industry's most famous traders. The move comes a week after a former SAC Capital employee was charged with running the most lucrative insider trading scheme ever in a series of transactions Cohen signed off on. Cohen and a top SAC executive told investors on a 20-minute long conference call on Wednesday that the Securities and Exchange Commission had issued a so-called Wells notice to the firm, according to two sources, who listened to the call. This puts new pressure on Cohen, a multibillionaire whose firm once made up as much as 3 percent of the New York Stock Exchange's daily trading activity. For years, Cohen and SAC have been dogged by allegations that the firm has relied on insider information to deliver an average annual return of 30 percent since

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