Today is the quarterly deadline for SAC Capital investors to redeem their money from the embattled Stamford, Connecticut-based hedge fund. 

According to multiple press reports, the hedge fund could be left with less than a billion in outsider money. 

The Wall Street Journal's Jenny Strasaburg reported that SAC sees investors yanking $3.5 billion from the hedge fund by today's deadline.

The fund already saw investors ask to pull $1.7 during the first quarter redemption period. 

If those estimates are correct, it would leave the hedge fund with very little outsider capital.  Bloomberg News estimates that it could be left with less than $1 billion.

About $9 billion of SAC's $15 billion in AUM belong to billionaire founder Steve Cohen and the fund's employees.   According to Bloomberg News, $7.5 billion of that is Cohen's and the other $1.5 billion belongs to employees.  

Bloomberg News reported earlier that Cohen has considered returning outsider money and running SAC as a family office.  

It's widely known that Cohen is the ultimate target of the government in their crackdown on insider trading.

In the case against former SAC portfolio manager Mathew Martoma, Cohen has been identified as "Portfolio Manager A." 

He has not been charged with any wrongdoing.  He may never be charged and he has maintained that he acted appropriately.  

Back in March, SAC agreed to pay $616 million to the Securities and Exchange Commission to settle two separate civil insider trading cases.  

In late April, SAC's lawyers called a meeting at the United States' attorney's office in Manhattan and they were surprised when 17 government officials showed up, the New York Times' Peter Lattman and Ben Protess reported.

After that meeting, the New York Times reported that Cohen and other SAC execs received subpoenas to testify before a grand jury in an insider trading case against his hedge fund.  

Under the statute of limitations for insider trading, if the government were going to file any additional charges in this case they would have to do so by mid-July, which is the five year anniversary of the trades being questioned. 

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Yesterday was the deadline for investors to redeem their money from embattled Stamford, Connecticut-based hedge fund SAC Capital as the government's insider trading investigation intensifies.  

According to Bloomberg News, the fund could now be left with less than $1 billion in outsider money.

It was estimated investors would request to pull out $3.5 billion in addition to the $1.7 billion that was marked in the first quarter for redemptions.  

SAC manages about $15 billion.  Of that, $9 billion belongs to founder Steve Cohen and employees and the rest is outsider money.  

Those outside investor redemptions are a big deal and not just to SAC.  

The New York Times' Peter Lattman explains why Wall Street would be freaking out: 

But a major reason for the intense interest on Wall Street, senior brokerage firm officials say, is a commercial one: SAC has generated billions of dollars in revenues for brokerage firms over the years. Several executives — all citing client confidentiality — said that the prospect of a severely diminished SAC would hurt their bottom line, which has created fear and anxiety on trading desks across Wall Street.

“This is going to have a significant impact to the Street, full stop,” said a senior executive at a brokerage firm that counts SAC as one of its largest clients... 

The brokerage business relies on trading volume. Brokers earn commission for each share traded.  For example, a broker could make anywhere from half a penny per share or five cents a share.  

A hedge fund behemoth like SAC Capital is a huge player.  Back in 2006, the Wall Street Journal reported that SAC's trading accounted for 2% of all of the stock market activity.

It's easy to see how they would be a desired client on the Street.  

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Billionaire hedge fund manager Steven A. Cohen, who runs the super-secretive hedge fund SAC Capital Advisors, has a reputation on the Street for being one of the most successful traders.

Cohen launched his Stamford-headquartered hedge fund in 1992 with only $25 million. Today the fund has $14 billion assets under management and employees around 900 people globally. 

During the late 1990s and early 2000s, Cohen came into prominence as a powerful Wall Street trader for his grand slam returns. 

He's been in the spotlight for a different reason. 

Late last year, he was identified as "Portfolio Manager A" in the latest insider trading case against former CR Intrinsic (a subsidiary of SAC) portfolio manager Mathew Martoma. The New York Times recently reported that Cohen and others at the firm also received subpoenas to testify before a grand jury in the case. 

It's well-known that Cohen is the ultimate target of the government in their crackdown on insider trading.  

While he has been implicated in the latest insider trading case, it's important to keep in mind that he has not been charged with any wrongdoing.  In fact, he may never be charged. 

He's maintained that he acted appropriately.  

Now let's get to know Cohen better.  

He's a Long Island native. He grew up in a middle class family and had a lot of siblings.

Steve Cohen was born on June 11, 1956. He's the third out of eight kids.  

He grew up on Great Neck, Long Island, New York. 

His father worked at a dress manufacturer and his mother was a homemaker who also taught piano lessons. 

Source: BusinessWeek, Source: WSJ 

In high school, the billionaire worked at a supermarket.

Cohen was a "fruit boy" at Bohack supermarket where he made a $1.85 an hour.

He quit that job because he was making more at the poker table.  

Source: Vanity Fair

He graduated from Wharton with a degree in economics.

He studied economics at the Wharton School of Business at the University of Pennsylvania.  

CNBC's Kate Kelly reports that the second quarter redemptions at embattled hedge fund SAC Capital were between $2 and $3 billion. 

CNBC's Kelly noted that the number is closer to $3 billion. 

This was pretty much in line with expectations.

It was estimated investors would request to pull out $3.5 billion.  During the Q1 deadline, $1.7 billion was marked for redemptions.

SAC Capital, which was founded by billionaire Steve Cohen, manages about $15 billion.  Of that, $9 billion belongs to Cohen and SAC employees.  The rest is outsider money. 

The government has been intensifying its insider trading probe at the fund.  

In the case against former SAC portfolio manager Mathew Martoma, Cohen has been identified as "Portfolio Manager A."  He has not been charged with any wrongdoing and he has maintained that he acted appropriately.   

Cohen and a handful of other execs recently received subpoenas to testify before a grand jury. 

Back in March, SAC agreed to pay $616 million to the Securities and Exchange Commission to settle two separate civil insider trading cases.  

Under the statute of limitations for insider trading, the government has until the end of July, the anniversary of the tradse in question, to file additional charges. 

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NEW YORK (Reuters) - As billionaire investor Steven A. Cohen deals with a spate of redemptions out of his own hedge fund, another firm in which his SAC Capital Advisors has money saw returns plummet in the first four months of the year.

Adams Hill Capital, run by former SAC equity portfolio manager Andrew Schwartz, was down 8.34 percent to the end of April, according to an investor note reviewed by Reuters.

In the same period, the S&P 500 stock index rose more than 12.7 percent and hedge funds on average gained about 4.6 percent, according to hedge fund tracking firm eVestment.

Adams Hill lost about 7.4 percent alone in April, when the stock market gained 1.9 percent. It could not be determined whether the hedge fund made up ground in May.

Adams Hill, along with another firm called Scopus Asset Management, is listed on regulatory filings as an adviser to an SAC Capital portfolio, meaning it manages a dedicated pool of money for Cohen's hedge fund.

It is not uncommon for large hedge funds like SAC Capital to employ other advisers, also known as sub-advisers, to manage some of a firm's money, especially if a manager is impressed with the outside firm's track record.

Adams Hill and SAC did not immediately respond to a request for comment.

Adams Hill, which in total oversees roughly $425 million in assets according to the April investor note, manages more than $100 million of SAC's money, according to a person familiar with Schwartz's firm.

While it is never a good thing for a hedge fund to lose money, poor returns at Schwartz's Westport, Connecticut-based fund come at a particularly bad time, since SAC is set to contract significantly over the next several months due to heavy redemptions by outside investors.

There has been much speculation on Wall Street about how Cohen and his 21-year-old firm will deal with requests by investors to redeem billions of dollars in the wake of an insider-trading probe that has intensified in recent months.

People familiar with the fund said outside investors asked to redeem up to $4 billion in the second quarter, on top of the $1.7 billion in first quarter redemption requests.

The withdrawals mean that SAC Capital, which will return the money by year's end, will shrink in size by about 45 percent. That could impact Adams Hill if Cohen decides to pull back money from the fund as SAC's capital base shrinks, said people in the hedge fund community.

Schwartz, who brought three SAC colleagues with him to his new fund, ran a large portfolio when he worked at SAC that focused on global resources equities.

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Federal investigators are putting the final touches on an agreement that would give them access to key evidence in the case against former SAC Capital employee Mathew Martoma, the FT reports.

Last year Martoma was accused of participating in the most lucrative insider trading scheme of all time, in which he used Dr. Sydney Gilman a former professor of neurology at the University of Michigan's medical school, to get inside information on two pharmaceutical stocks.

Up until now, the University of Michigan has refused to give lawyers on the prosecution and/or the defense an encryption key to decode the files on Gilman's laptop — the one on which he allegedly stored the information he passed to Martoma.

From FT:

Peter Barkey, a spokesman for the medical school, said: “We are in the process of finalising agreement with the US attorney’s office.” He expected it to be completed by Wednesday.

Mr Barkey said the university would not turn over the encryption key because of its responsibility to protect patient confidentiality, but it was nearing an agreement with the government and Mr Martoma’s lawyer to run keyword searches. The negotiation was focused on sorting out the exact search terms, he said.

Looks like this thing is getting down to the wire.

For more details, head to the FT>

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Hedge fund managers are drooling over the billions of dollars in outside money headed out of Steven A. Cohen's portfolio and looking for a new home.

Cohen, the billionaire founder of SAC Capital Advisors, is facing an insider trading imbroglio at his fund, but has yet to be personally implicated.

SAC manages about $15 billion ($9 billion of which belongs to Cohen and his employees). Outside investors redeemed between $2 and $3 billion in Q2.

Now other firms stand to benefit. 

Reuters reports:

Israel Englander's $18 billion Millennium Management, which has long had a rivalry with SAC, is the name that comes up most often as a possible alternative investment, the industry sources said. The firm also relies on a group approach where dozens of smaller portfolio teams, rather than one or two main managers, buy and sell securities quickly, often thousands of them.

Balyasny Asset Management, Visium Asset Management and Kenneth Griffin's Citadel, which all feature multi-manager trading teams, have also been named frequently as candidates for some of the estimated $3 billion to $4 billion expected to leave SAC, said industry sources.

Several people mentioned Hutchin Hill, a $1.1 billion firm run by former SAC Capital trader Neil Chriss. The firm employs a strategy similar to Mr. Cohen's and is taking money from new investors.

Reuters reports that it will take months for the money to be returned to investors, so it may be too soon to predict which hedge funds will profit from SAC's woes. 

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Billionaire hedge fund manager Steve Cohen probably had a good Fourth of July. 

The Wall Street Journal reports that Cohen, the founder of Stamford-based SAC Capital Advisors, won't be hit with any criminal insider trading charges, according to unnamed sources familiar. 

Everyone knows that Cohen is the government's ultimate target in its massive crackdown on insider trading. 

In the insider trading case against former SAC portfolio manager Mathew Martoma, Cohen has been identified as "Portfolio Manager A."  While he has been implicated, he has not been charged with any wrongdoing.   What's more is Cohen has maintained that he's confident that he acted appropriately.

Meanwhile, Martoma has refused to cooperate with the government and their probe, according to the Journal's report.  The former SAC employee has also pleaded not guilty and is set to go to trial in November, the report said. 

Under the statute of limitations for insider trading, if the government were going to bring additional charges in this particular case they would have to do so by mid-July, which is the five year anniversary of trades being questioned. 

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(Reuters) - U.S. securities regulators were united in their decision to file civil charges against billionaire hedge fund owner Steven A. Cohen last week, in a high-stakes case that could result in Cohen being barred from the industry, people familiar with the case told Reuters.

The charges by the Securities and Exchange Commission against Cohen still fall short of what the SEC had hoped for.

The agency has been struggling to uncover evidence implicating Cohen with insider-trading, one of those people said.

In a last-minute 9 a.m. meeting on Friday, with a five-year statute of limitations deadline approaching, enforcement lawyers presented SEC commissioners with a lengthy memo urging them to vote to charge Cohen with failing to supervise former SAC Capital Advisors portfolio manager Mathew Martoma and SAC executive Michael Steinberg, sources said.

Both Martoma and Steinberg are facing criminal and civil insider trading charges.

SEC Chair Mary Jo White, an independent, and Democratic SEC Commissioners Elisse Walter and Luis Aguilar attended the meeting and subsequently voted in favor of filing charges, these people said.

SEC Republican Commissioner Troy Paredes was on a plane en route to Texas at the time, but he cast a yes vote after he landed, according to one of the sources.

The SEC's other Republican commissioner, Daniel Gallagher, was out of town last week and did not participate in any of the SEC's closed door enforcement meetings.

Jonathan Gasthalter, a spokesman for SAC Capital, declined to comment beyond his statement on Friday, in which he said the SEC's case was without merit and that Cohen intended to fight the charges.

Some people are seeing the SEC's case against Cohen as an example of White's pledge to get tough and flex the SEC's enforcement muscles.

She has already established a new policy in which the SEC will occasionally try to extract admissions of wrongdoing in settlements, or else force the case to trial.

Others internally, however, see the Cohen case as an effort to save face after several long, hard years of investigating him for insider-trading.

In all of that time, there has not been enough evidence to suggest he engaged in insider-trading. In addition, despite the fact that several of his employees have been charged criminally with insider-trading, no one has stepped forward to testify against him as a government witness.

Nevertheless, the filing of the Cohen case last week was one of several high-profile actions by the SEC in what appears to be pattern of cracking down on alleged law-breakers.

On Thursday, the SEC also voted behind closed doors in a 3-1 vote to reject a deal between the enforcement division and hedge fund manager Philip Falcone and his hedge fund Harbinger Capital Partners.

That settlement was rejected amid concerns it was too lax, a person told Reuters last week.

In addition, the SEC also charged the city of Miami and its former budget director with fraud on Friday in a rare case in which the SEC accused the city of being a repeat offender by violating a prior cease-and-desist order for similar misconduct in 2003.

Cohen represents one of the most high-profile defendants to face SEC charges this year.

In March, SAC agreed to pay a record $616 million penalty to settle a separate SEC lawsuit arising from an investigation of trading on illegal information.

In this latest case, the charges are not fraud-based and do not carry stiff penalties. But in a move that could greatly curtail Cohen's income, the SEC is seeking to bar him from managing other people's money.

It is still unclear whether the SEC will seek a lifetime bar, or a bar for a shorter duration.

But even a temporary industry bar could pose a major hassle.

That's because the process to apply for re-admission after the bar expires is tougher for investment advisers and broker-dealers than some other professions, such as lawyers.

In order to be re-admitted, the person must demonstrate how he or she will be supervised so that investors will not be harmed before the SEC will agree to sign off.

For someone like Cohen, it might be difficult to demonstrate how he would be supervised.

Assuming the case eventually does go before an SEC administrative law judge, the SEC could try to call him to testify.

Unlike a federal court system, however, the SEC's administrative court is less transparent - a fact that could make it more difficult for Cohen's investors and the general public to follow the trial.

In federal court cases, the filings by all the parties and the accompanying exhibits are often available online in a database that can be accessed by the public for a fee.

At the SEC, only the civil charges, orders and decisions are routinely posted online.

The other documents filed often must be obtained through a Freedom of Information Act request - a lengthy process that can take months or even years.

(Reporting by Sarah N. Lynch; Editing by Theodore d'Afflisio)

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Julian Robertson, CEO of Tiger Management, went on Bloomberg Surveillance today to talk shop.

So of course Apple came up — the stock was one of the legendary hedge funder's largest holdings at one point.

He has since disavowed it.

He once called Apple the greatest company in the world.

Now?

"I read the book on Steve Jobs and I developed a tremendous amount of respect and admiration for his intellect. But I came to the conclusion that he really was a maverick person and he really could not establish a great long-term entity," he told Bloomberg's Tom Keene. "I don't think the Steve Jobs was the type of guy that would have developed a great, long-term leadership."

"I think the Google people have a better way of getting things done," he said.

That's a big 180.

Robertson also said he didn't think the SEC's case against SAC's Steve Cohen would have a "big effect" on the industry at large. "I think hedge funds are generally extremely careful that they adhere to the straight line of the rules," he said.

Here's the transcript courtesy of Bloomberg Television:

Robertson on whether the hedge fund industry will be forever changed in the wake of SAC:

"No, I don't think so. I think hedge funds are generally extremely careful that they adhere to the straight line of the rules and I don't expect that to happen, to have a big effect on it."

On whether he sees the hedge fund industry as a group of top performers and everyone else or whether he bundles performance together:

"I don't think you can bundle everyone together. But I do think one of the things that's affected hedge fund performance over the last, well, really since it started really getting big around the '80s, is the increase in size of hedge funds. It was so much easier to compete with Bank Trust departments, with individual investors, with mutual funds than it is with other hedge funds. And I think the success of hedge funds in general has probably hurt the performance of individual hedge funds…Because the competition is tougher."

On why he's not constructive on Apple anymore:

"I read the book on Steve Jobs and I developed a tremendous amount of respect and admiration for his intellect. But I came to the conclusion that he really was a maverick person and he really could not establish a great long-term entity. He was just a very mercurial, tough guy. And I just don’t believe he could have done that. And I think the Google people have a better way of getting things done…The leadership and Apple, I don't think the Steve Jobs was the type of guy that would have developed a great, long-term leadership."

On key attributes he looks for in "Tiger Cubs" like Nehal Chopra:

"Well that's sort of secret to us…Nehal has not mentioned one of the aspects of her being which sort of got us very interested. And this was almost as important as her degree from Wharton. She was on the Indian National Tennis Group. And was you know, David Cup caliber, that type of thing. And she's a vicious competitor. She is a winner. And I find that people who compete well in one thing compete well in other things." 

On the hedge fund industry's overall performance:

"Hedge funds do better than the markets in bad markets because they are hedge funds. And the, the ideal for hedge fund is a vigorous active market that doesn't move a whole lot. There they can make it in both the long and short basis….In '07, hedge funds, I know ours, just blew it out….It was just unbelievable. And then in '08, we lost, you know much of that."

On how to get Americans re-engaged with the stock market:

"Well I don't think it's necessary for Americans to get re-engaged with the stock market. I actually think maybe there is too much emphasis on the stock market around everywhere. I would rather see so many of the great young people become scientists or engineers than get into the stock market. We've got too much talent in that business…Yeah, I'd rather they go to these other areas where we're desperate for help."

On why he's focused on supporting education in Newark:

"Well I think Newark needs help. I think Cory [Booker has] done a great job of developing the help. He was helped tremendously by Mark Zuckerberg and a $100 million grant that he made. And we are very concerned about the transition of teachers. And the way the system is set up now, it is a last in-first out basis. In other words, the last teacher hired is fired. And in Newark we arranged to really work out a deal with the unions. And the unions came in and worked with us on it. And what happened was that we actually bought out the bad teachers and kept the good teachers. In other words bought them out, paid their contracts off."

On his fifth grandchild being born yesterday:

"I welcomed the fifth grandchild yesterday…Outdoing the Queen and the Duchess by a slight amount. And actually beating the doctor who delivered the baby by about two hours. Because two hours after the baby arrived, the doctor went into labor and had her child."

On whether he reads every email he receives:

"No sir."

SEE ALSO: Everyone Is Talking About Dan Loeb's Taunting Message To Bill Ackman On His Bloomberg Terminal

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BIG report from WSJ.

Reporters Jenny Strasburg and Michael Rothfeld say that prosecutors are set to file criminal charges against the hedge fund SAC Capital.

The planned charges against SAC would mark the culmination of a yearslong probe into suspected securities fraud at one of the biggest, most successful hedge-fund firms in the country.

The action is anticipated barring any last-minute pact with SAC or other reversal of government strategy, according to people familiar with the matter.

As Strasburg and Rothfeld note, this represents the culmination of a long effort to get the firm on insider trading charges.

The good news, according to the report, is that the charges are likely to be against the firm, not Cohen himself.

Just last week, Cohen was sued by the SEC (a civil action) for failure to properly supervise his traders. The SEC sought to ban Cohen from investing money.

At the time that weak charge was seen as something of a "win" for Cohen, although it was clear that he is planning a vigorous defense of that. Over the weekend, Cohen distributed a 46-page white paper internally explaining why the SEC's suit was wrong. You can read that paper here.

Already the firm has seen huge investor outflows, and multiple charges against the firm (both criminal and civil) will likely further debilitate it.

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NEW YORK (Reuters) - Federal prosecutors are continuing to look for ways to build a criminal case against billionaire trader Steven A. Cohen at the same time as they prepare to announce criminal charges against his hedge fund, said people familiar with the investigation.

Charges of securities fraud and wire fraud expected to be filed against the company on Thursday, according to a source familiar with the investigation.

The charges against Cohen's $15 billion SAC Capital Advisors come after nearly seven years of investigations of his firm on allegations of insider trading.

Authorities do not plan to charge Cohen with any criminal wrongdoing, said the source.

A spokeswoman for Manhattan U.S. Attorney Preet Bharara declined to comment as did a spokesman for the Federal Bureau of Investigation.

A spokesman for SAC Capital also declined to comment.

The filing of a criminal charge against SAC Capital could be a death-knell for the Stamford, Conn.-based firm that employs nearly 1,000 people and made billions for the 57-year-old Cohen.

It is likely that Wall Street firms that lend money and trade with SAC Capital would stop doing so after a criminal charge is filed. However, since more than $15 billion of the firm's assets represents money for Cohen and his employees, SAC Capital has substantial resources to continue functioning.

But even as federal authorities plan to move against Cohen's business, they are continuing to investigate the activities of some of his former employees, including former technology stock trader Dipak Patel, said the source familiar with the matter.

Patel, who once managed up to $1 billion for Cohen and left SAC Capital in 2011, was implicated in potentially improper trading by former SAC Capital analyst Wesley Wang, who pleaded guilty last July and became a cooperating witness for federal authorities.

Federal authorities have wiretapped communications involving Patel and have been considering criminal charges against the Merrick, N.Y. resident, said another person who has been briefed on the investigation. Neither Patel nor his attorney, Tai Park, returned phone calls seeking comment.

Federal prosecutors have debated filing a criminal charge against Cohen's 21-year-old hedge fund, one of the industry's most successful, for many months. The fund is one of the largest payers of commissions on Wall Street, generating more than $300 million a year in trading fees alone for Wall Street brokerages.

Several legal experts, including former federal prosecutors, said the decision to charge the hedge fund, but not Cohen, with wrongdoing would be a tacit admission that the nearly seven-year investigation failed to find sufficient evidence of trading on illicit inside information by Cohen.

A criminal charge against SAC Capital would be one of the most high-profile corporate cases since U.S. prosecutors indicted accounting firm Arthur Andersen for its role in the Enron scandal, a move that effectively forced the audit firm to go out of business.

Some legal experts have questioned whether it is appropriate for prosecutors to charge SAC Capitalwith criminal wrongdoing but not charge the firm's founder and leader.

"It's part of an overall level of frustration about this whole enterprise, and so they're trying to come at it from every possible angle to destroy this guy's business," said C. Evan Stewart, a defense lawyer and a partner Zuckerman Spaeder. "When the government gets an individual or company in its sights and decides that person's not worth doing business, it's going to use every tool."

If prosecutors do criminally charge SAC Capital, it will come after the U.S. Securities and Exchange Commission similarly decided it had insufficient evidence to file civil fraud charges against Cohen.

Instead, the SEC on July 19 filed an administrative order against Cohen charging him with failing to supervise his employees and spotting potential "red flags" involving allegations of insider trading by two of his employees.

An SAC spokesman said on Friday Cohen will vigorously defend the failure to supervise charge. A 46-page "white paper" prepared by SAC Capital's lawyer says Cohen is often too busy to read emails and never saw an email that regulators contend included a reference to inside information about computer company Dell Inc.'s earnings in summer 2008.

Federal authorities began looking into the possibility of filing a criminal charge against SAC Capital after former portfolio manager Jon Horvath pleaded guilty to passing on inside information about Dell during the summer of 2008 to his supervisor Michael Steinberg and traders at other hedge funds.

Earlier this year, prosecutors charged Steinberg with insider trading involving shares of Dell. Steinberg has pleaded not guilty.

To date, nine former and current SAC Capital employees have been implicated or charged with wrongful trading while at the firm.

For now, Wall Street appears to be shrugging at news reports that federal prosecutors are getting closer to filing criminal charges against SAC Capital.

Wall Street firms are continuing to trade with the fund as usual, according to several market sources.

A headhunter said in the past several weeks she had gotten more resumes from employees of SAC Capital, but "not a flood" of resumes.

Several investment firms that have money with SAC Capital, but submitted redemption notices in June to pull their dollars by year's end declined to comment. SAC Capital has said it plans to return more than $4 billion in outside investor money by year's end.

One outside investor voiced support for Cohen and SAC Capital, despite the firm's growing regulatory woes.

Ed Butowsky, managing director at Chapwood Capital Investment Management, which has several million dollars invested with SAC Capital, said: "I don't believe that criminal charges against the firm would impact Steve Cohen's traders and their ability to make money."

(Reporting by Matthew Goldstein and Emily Flitter, additional reporting by Katya Wachtel, Jennifer Ablan and Svea Herbst-Bayliss; Editing by Leslie Gevirtz)

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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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The Southern District of New York, led by U.S. attorney Preet Bharara,  just wrapped up its press conference announcing charges against SAC Capital.

There weren't too many new revelations in Bharara's remarks which weren't already included in the indictment.

Of course, reporters tried asking about the implications of the charges against SAC CEO Steve Cohen, and why another portfolio manager ended up being charged instead.

Bharara didn't budge on that one either.

Instead, here's how he responded, via CNBC's Eamon Javers:

Preet: "People like to talk about fish + the size of fish. We don't think about it that way. Sometimes a small fish is very delicious."

— Eamon Javers (@EamonJavers) July 25, 2013

Does this mean, as experts told WSJ's David Benoit, that Cohen is the one that got away?

SEE ALSO: Check Out Steve Cohen's New House

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Steve Cohen's $14 billion SAC Capital Advisors broke its radio silence moments ago to respond to today's federal indictment against the firm on criminal charges of insider trading.

Via CNBC's Kayla Tausche: 

"SAC has never encouraged, promoted or tolerated insider trading and takes its compliance and management obligations seriously. The handful of men who admit they broke the law does not reflect the honesty, integrity and character of the thousands of men and women who have worked at SAC over the past 21 years. We will continue to operate as we work through these matters." 

According to Bloomberg News, SAC sent out another statement saying the government's action is not intended to affect ongoing operations or redemptions.  SAC expects an agreement with the government to protect client interestes. 

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SkyBridge Capital, a fund-of-funds run by Anthony "The Mooch" Scaramucci, has taken most of SkyBridge's money out of embattled SAC Capital Advisors, Fox Business Network's senior correspondent Charlie Gasparino Tweeted.

According to Gasparino, it's up to SkyBridge investors to pull out the rest of the money, but Scaramucci expects them to do so.

Earlier today, the $14 billion Stamford, Connecticut-based hedge fund run by Steve Cohen was hit with a federal indictment on criminal charges of insider trading.  Cohen was not charged or named explicitly in the indictment. 

Moments later, SkyBridge's Scaramucci called into CNBC's "Halftime Report" to weigh in on the indictment.  It wasn't clear what SkyBridge was going to do about its money it has invested in SAC. 

"So I think right now I think we just have to feel bad for the employees there and for the families associated with this. I have said long ago that if they have a case and it's a substantial one, let's bring it. Obviously, the presumption is still on innocence both for the firm and for Steve. That's the way our criminal justice system works. But the government has that case. I hope Steve and his team will get the opportunity to say their side of the story as well. But as it relates to public policy and things like that, fraud is a terrible thing, and I hope to God that they will be innocent, but if they're not, obviously we'll do what's prudent for our investors as everyone else would."

Scaramucci, who has personal money invested with SAC, also defended Cohen.

"...at the end of the day, I like Steve. He's a friend of mine. I have tried to teach my children and my employees and people around me you stick by your friends when they're in trouble, and if he's obviously done something wrong here, hopefully it gets settled very quickly," Scaramucci said on CNBC via telephone from his vacation.

"I say to my other friends out there on Wall Street, you know, let's not cut and run from people that we've been close to for a very long period of time," he added later during the interview. 

Here are Gasparino's Tweets: 

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Fox Business Senior Correspondent Charlie Gasparino, who has written a book on insider trading called "Circle of Friends,"has a piece in TIME following today's criminal indictment of $14 billion SAC Capital Advisors. 

One of Gasparino's sources, who is friends with SAC's founder Steven Cohen, said that the billionaire hedge fund manager has been putting on lbs. lately.

From TIME: 

A friend of mine ... who knows Cohen personally said he ran into him at the MLB All-Star game at Citi Field, the home of the New York Mets, in which Cohen owns a small stake. Cohen “looked terrible…and he’d gained 15 pounds” since the time the two met just a month or so earlier. More than that, my source told me, Cohen conceded that his business was basically finished and “at this point my No. 1 goal is not getting personally indicted.”

Although Cohen wasn't explicitly named in the indictment today, Gasparino writes "don’t be surprised if you see an indictment of Cohen in the coming weeks as well." 

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Yesterday Steve Cohen's $14 billion SAC Capital Advisors was slapped with an indictment from a federal grand jury on charges of criminal insider trading. 

The Stamford, Connecticut-based hedge fund and three of its subsidiaries were charged with four counts of securities fraud and one count of wire fraud, according to the indictment. 

Now people are starting to wonder how this could potentially affect other Wall Street firms.  

SAC manages about $14 billion in assets.  About $9 billion of that AUM belongs to Cohen and SAC employees and the rest is outsider money.  

But remember, the fund was also recently hit with redemptions from outside investors and now it's estimated that the firm would be left with about $1 billion in outside capital. 

The real reason why folks on Wall Street care about what's going with SAC is because the hedge fund is a major player when it comes to generating revenue for brokerage firms.  

The brokerage business depends on trading volume.  It doesn't matter whether a stock is going up or down. It's about the amount of shares being traded. That's because brokers earn commission for each share traded.  A broker could make anywhere from half a penny per share or five cents a share.  

SAC Capital is seen as a huge player on the Street.

Back in 2006, the Wall Street Journal reported that SAC's trading alone accounted for 2% of all of the stock market activity.  It's unclear what the number is nowadays, but it's easy to see why they would be a desired client for a broker. 

Just before the indictment came out, Bloomberg News Michael J. Moore and Zeke Faux reported that banks were weighing whether or not to suspend trading, lending, and prime brokerage services with SAC Capital.

According to Bloomberg, SAC is one of the biggest clients for Morgan Stanley and Goldman Sachs.  The fund has also been a client for prime brokerage services to JPMorgan, Credit Suisse and Barclays, the report said.  

It's not just banks that are worried. DealBook's Peter Eavis reports that it's possible the impact could go further down the line. 

Not only does Wall Street support the fund’s stock and derivatives trades, but the firm is also a reliable client for those further down the food chain, like technology equipment providers. Now, the fund’s banks face an uncomfortable choice. Should they keep acting as a broker to SAC Capital? There will be strong temptation to maintain full ties with the fund. The payments from SAC Capital are welcome during these leaner times on Wall Street. And banks may be reluctant to drop a client that has not yet been proved guilty.

Cohen started SAC in 1992 with $25 million AUM.  Today the hedge fund behemoth employs about 900 people globally. 

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Defense lawyers for Steve Cohen's $14 billion SAC Capital Advisors pleaded not guilty to all five criminal charges of insider trading during an arraignment this morning at a federal court in Lower Manhattan, CNBC's Kayla Tausche reports.

This was expected and this also allows the fund to continue operations. 

Yesterday, a federal grand jury indicted SAC.  The fund was charged with four counts of securities fraud and one count of wire fraud, the indictment states. According to the indictment, U.S. prosecutors are also seeking the forfeiture of profits from ill-gotten gains.

U.S. Attorney Preet Bharara said during a press conference yesterday that the indictment "is more broadly an account of a firm with zero tolerance of low returns, but seemingly questionable tolerance for bad behavior." Bharara added that the firm had a "compliance system that appeared to talk the talk, but almost never walked the walk." 

SAC said in a statement yesterday afternoon following the U.S. Attorney's presser that it has "never encouraged, promoted or tolerated insider trading and takes its compliance and management obligations seriously." 

Bharara has a 100% success track record in prosecuting insider trading cases, CNBC's Tausche pointed out.   

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Here's a fact likely in the back of Steve Cohen's mind: Manhattan U.S. Attorney Preet Bharara's office has won convictions or guilty pleas in 100% of presented cases.

And regulators are even more eager to sound the death knell for Cohen's elusively profitable SAC, a $13.9 billion hedge fund (of which $7.5 billion is Cohen's own fortune).

For regulators, the case has been years in the making.

The government — which will likely seek to bleed the company through unprecedented restitution and fines — argues that SAC's insider trading scheme dates back to 1999.

It wasn't long after that SAC emerged on regulators' radar.

From a 2003 New York Times article (via Matt Goldstein):

The regulatory inquiry, which began almost two years ago, centers on whether information from Ms. Becker's firm, Lehman Brothers, was made available to her husband, Michael J. Zimmerman, a stock trader at SAC Capital Advisors, a hedge fund with offices in Connecticut and New York, according to people involved in the inquiry. Investigators are trying to determine whether he knew about research reports by Lehman analysts before they were released to clients and whether he profited by trading in those securities.

That inquiry into SAC ended, but nevertheless piqued interest in the firm (the kind of interest a firm doesn't want).

It's with that in mind that we get the government indictment, which has a less than charitable understanding of the instant messages sent between traders and Steve Cohen.

Dealbreaker's Matt Levine sums up the complaint: "Despite the euphemism training, people kept emailing Cohen saying 'here’s a trade based on inside information' and he kept replying, in essence, 'cool.'"

This case is the Holy Grail for regulators. It has been for a long time.

Institutional investors have already fled Cohen's warm embrace. As the case progresses, more investors could do the same.

And while Bharara has said he's not trying to push SAC out of business, after billions in fines, it could very well happen.

SEE ALSO: Here's The Real Reason Why Wall Street Is Freaked Out About The Insider Trading Charges Against SAC Capital

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