The SEC on Friday filed civil charges against Steven A. Cohen, the founder of hedge fund SAC Capital Advisors, accusing the billionaire of failing to prevent insider trading.
The Securities and Exchange Commission in a statement Friday afternoon said:
"Cohen received highly suspicious information that should have caused any reasonable hedge fund manager to investigate the basis for trades made by two portfolio managers who reported to him — Mathew Martoma and Michael Steinberg. Cohen ignored the red flags and allowed Martoma and Steinberg to execute the trades. Instead of scrutinizing their conduct, Cohen praised Steinberg for his role in the suspicious trading and rewarded Martoma with a $9 million bonus for his work. Cohen's hedge funds earned profits and avoided losses of more than $275 million as a result of the illegal trades."